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Italy’s PM Matteo Renzi wins confidence vote on labour reforms Italy’s PM Matteo Renzi wins confidence vote on labour reforms
(about 3 hours later)
The Italian prime minister, Matteo Renzi, has won the most important parliamentary confidence vote of his eight-month-old government on labour reform proposals he hopes will boost his EU credentials.The Italian prime minister, Matteo Renzi, has won the most important parliamentary confidence vote of his eight-month-old government on labour reform proposals he hopes will boost his EU credentials.
Renzi won the vote in senate by 165 votes to 111 early on Thursday. Had he lost, he would have had to step down. The votehad been expected on Wednesday afternoon, but was delayed late into the night after a day of raucous stonewalling by opposition parties. The legislation now goes to the lower house. Renzi won the vote in the senate by 165 votes to 111 early on Thursday. Had he lost, he would have had to step down. The vote had been expected on Wednesday afternoon, but was delayed late into the night after a day of raucous stonewalling by opposition parties. The legislation now goes to the lower house.
Renzi called the vote in order to cut short debate over his broad proposals to change labour laws that many economists say have stifled job creation and scared off foreign investors in a country whose economy has stagnated for two decades.Renzi called the vote in order to cut short debate over his broad proposals to change labour laws that many economists say have stifled job creation and scared off foreign investors in a country whose economy has stagnated for two decades.
“We want to eliminate the poison that kills investment,” the labour minister, Giuliano Poletti, said in his speech during the senate debate.“We want to eliminate the poison that kills investment,” the labour minister, Giuliano Poletti, said in his speech during the senate debate.
The government’s proposals are still very broad-brushed, however, and it remains to be seen how far Renzi’s proposed reforms will go.The government’s proposals are still very broad-brushed, however, and it remains to be seen how far Renzi’s proposed reforms will go.
It is unclear, for example, how the government plans to change a measure that currently makes it difficult for companies with more than 15 employees to fire workers with open-ended contracts. None of the changes are expected to apply to Italy’s bloated public sector.It is unclear, for example, how the government plans to change a measure that currently makes it difficult for companies with more than 15 employees to fire workers with open-ended contracts. None of the changes are expected to apply to Italy’s bloated public sector.
Senators voted on a so-called “delegating law”, which authorises the government to work out the details of the reform over the coming months.Senators voted on a so-called “delegating law”, which authorises the government to work out the details of the reform over the coming months.
Government officials hope that success in the confidence vote will be seen by Italy’s EU partners as a blank cheque for Renzi in pushing his reforms.Government officials hope that success in the confidence vote will be seen by Italy’s EU partners as a blank cheque for Renzi in pushing his reforms.
The changes would let Renzi show Italy’s partners that his reform agenda is advancing, and would boost his EU credibility at a time when the country is backtracking on its debt-reduction pledges as the economy suffers a dire downturn and unemployment hits record highs.The changes would let Renzi show Italy’s partners that his reform agenda is advancing, and would boost his EU credibility at a time when the country is backtracking on its debt-reduction pledges as the economy suffers a dire downturn and unemployment hits record highs.
Renzi is preparing an expansionary 2015 budget in an attempt to stimulate the economy, and is hoping the EU allow him to bring down Italy’s huge public debt more slowly than the bloc’s fiscal rules dictate. Renzi is preparing an expansionary 2015 budget in an attempt to stimulate the economy, and is hoping the EU will allow him to bring down Italy’s huge public debt more slowly than the bloc’s fiscal rules dictate.
The chances of such leeway being granted will increase if the European Commission, Germany and other northern European countries are persuaded that Rome is finally carrying out structural reforms that will improve its dismal growth potential. The chances of such leeway being granted will increase if the European commission, Germany and other northern European countries are convinced that Rome is finally carrying out structural reforms that will improve its dismal growth potential.
The centre-left government of the 39-year-old former mayor of Florence enjoys only a slim majority in the senate. Renzi went into the vote saying he did not fear dissent within his own Democratic party (PD), which he took over less than a year ago, but some PD senators were very critical of the measure.The centre-left government of the 39-year-old former mayor of Florence enjoys only a slim majority in the senate. Renzi went into the vote saying he did not fear dissent within his own Democratic party (PD), which he took over less than a year ago, but some PD senators were very critical of the measure.
Walter Tocci said he would vote for the government, but then resign his seat in parliament in protest against the reform, which he said could erode workers’ rights and risked betraying the hopes of Italy’s unemployed youth.Walter Tocci said he would vote for the government, but then resign his seat in parliament in protest against the reform, which he said could erode workers’ rights and risked betraying the hopes of Italy’s unemployed youth.
Unemployment in the eurozone’s third-largest economy is running above 12% and at 44% for people under the age of 25. Young people lucky enough to find work are invariably hired on temporary contracts with no employment rights or job protection. Unemployment in the eurozone’s third-largest economy is running above 12% and at 44% for people under the age of 25. Young people lucky enough to find work are almost always hired on temporary contracts with no employment rights or job protection.
Renzi has made clear that any eventual law must change article 18 of the labour statute, which makes it difficult for companies to fire workers on indefinite contracts.Renzi has made clear that any eventual law must change article 18 of the labour statute, which makes it difficult for companies to fire workers on indefinite contracts.
Evidence shows that most workers prefer to negotiate a severance payment, and that the number of fired employees who return to their posts after a judge rules in their favour is limited. Companies, however, say the possibility of being forced to take staff back adds a level of uncertainty that makes it difficult to invest.Evidence shows that most workers prefer to negotiate a severance payment, and that the number of fired employees who return to their posts after a judge rules in their favour is limited. Companies, however, say the possibility of being forced to take staff back adds a level of uncertainty that makes it difficult to invest.
Renzi faces resistance from hard-line trade unions over any significant change to article 18, the sacred cow of Italian labour law and one that successive governments have failed to tackle. One union, the leftist CGIL, has threatened a national strike if the government tries to change the law.Renzi faces resistance from hard-line trade unions over any significant change to article 18, the sacred cow of Italian labour law and one that successive governments have failed to tackle. One union, the leftist CGIL, has threatened a national strike if the government tries to change the law.
Renzi hosted a conference of EU leaders in Milan on Wednesday, which he called to discuss ways of stimulating growth and job creation across Europe.Renzi hosted a conference of EU leaders in Milan on Wednesday, which he called to discuss ways of stimulating growth and job creation across Europe.
At the meeting, France and Italy pressed for an easing of budget restrictions to favour economic and jobs growth, but won no concessions from the German chancellor, Angela Merkel, who insisted countries had to move faster on reforms.At the meeting, France and Italy pressed for an easing of budget restrictions to favour economic and jobs growth, but won no concessions from the German chancellor, Angela Merkel, who insisted countries had to move faster on reforms.