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Italy, Labour market reform

Italy passes hire and fire labour ‘reforms’ but no hope of jobs or growth

The government of Mario Monti has passed labour ‘reforms’ that will make it easier for employers to fire workers.

The vote, after months of haggling in parliament, came as workers and their unions protested against the measures that seek to dump the costs of an escalating crisis of the global banking sector and the Euro on those who can least support them.

Thousands demonstrated across the country with a sit-in in central Rome outside parliament from the early hours of Wednesday.

The bill was backed by the main right-wing and centre-left blocs that have been supporting the ‘technocrat’ government headed by the former European Commissioner.

The leader of the right-wing bloc, media magnate and billionaire Silvio Berlusconi, who is gearing up for a political comeback after being ousted from the prime ministers’ office in November, sought to disassociate himself from the reforms, while, in classic contradictory fashion, instructing his MPs to back the package.A great many disobeyed (87 out of  209) but with the backing of the center-left Democrats and right-wing MPs from other smaller parties, the vote went through comfortably.

Italy’s largest trade union confederation, CGIL, which was co-ordinating protests Wednesday, argues that the reforms will not create a single job. Indeed, given the disastrous state of the economy (now in its fourth recession since 2001) it will likely destroy employment and depress already low wages as employers exercise their new power to cut labour costs in a bid to restore profits, it says.

This in turn will further depress already plummeting domestic spending, while the prospects of this boosting exports as lower labour costs feed through to cheaper products appears a pipe dream in a world where simultaneous austerity policies have led to recession across the Eurozone and beyond.

This means growth will continue to be illusory and since the lack of growth is driving bond spreads, the cost of borrowing will stay at levels that threaten economic collapse. Already, speculation is escalating that the Eurozone’s third largest economy will need to follow Ireland, Portugal, Greece and now Spain with a bailout.

The passing of the reforms was deliberately timed ahead of Thursday’s make-or-break EU summit to demonstrate willing on the part of the Italians to make sacrifices in the hope that German Chancellor Angela Merkel might budge from her austerity fetish. Wednesday night that sounded fanciful.

Radical left MEPs warned earlier Wednesday that this meeting of EU leaders ‘must mark a decisive break with the neoliberal canon that is leading Europe to another great depression’. GUE/NGL President Gabi Zimmer demanded that the ECB become a lender of last resort to ‘prevent market speculation on sovereign debt’ and moves, including a wide-ranging financial transaction tax, to make  ‘the financial sector must be made contribute more to solving the problems it has caused’.

Zimmer also dismissed the €130 billion ‘growth fund’ that Merkel has apparently backed, as ‘mere small change compared to bank bailouts’ and demanded instead a ‘real public investment pact’ funded by ‘progressive taxation,’ as a ‘sustainable’ way to ‘generate jobs, economic growth and tackle poverty and inequality.’

About revoltingeurope

Writer on Europe's Left, trade union and social movements @tomgilltweets or email [email protected]

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