16/10/2014
Jorge del Palacio is a lecturer of Political Science at ICADE
In recent weeks Italian political life has revolved around the package of measures – called 'Jobs Act' – that the government led by Matteo Renzi intends to pass to fight unemployment. Unemployment is one of Italy's major problems and no government has managed to address it adequately in recent years. According to the latest figures published in August, the overall unemployment rate is 12.3%. But the greatest Italian labour problem continues to be youth unemployment (under 25 years), reaching a rate of 44.2% and which is threatening to leave a whole generation out of the labour market. This general context of concern about unemployment has coupled with another factor that helps explain the urgency with which Renzi's government has acted to obtain the Senate's confidence for his package of measures: the celebration of the EU jobs and growth summit in Milan, before which Renzi wanted to appear with the homework done, or in progress.
The main objective of the package presented by Renzi is to make the labour market more flexible because, according to the Italian Government, its rigidity discourages companies from hiring new personnel. The diagnosis made by Renzi's government has resulted in a game of interesting alliances. The parties of the right – Forza Italia and Nuovo Centrodestra, with whom Renzi has a government agreement – are in favour of the measures and have supported them without any opposition. Instead, it's the left wing of the Partito Democratico, Renzi's own party, the one who has capitalised on public criticism to the project, accusing Renzi of being 'Thatcher's reincarnation'.
The measure triggering the resistance of the left wing of the PD is Renzi's Government's intention to modify Article 18 of the Workers' Statute, which forces to reinstate and compensate workers in case of unfair dismissal in companies with more than fifteen employees. Beyond its legal content, Article 18 of the Workers' Statute is a symbol of resistance to any form of free dismissal and the left wing of the PD and the trade union CGIL do not want to give it up.
If Renzi finally gets to impose his will and manages to pass all of the 'Jobs Act', this could result in a paradox: that a secretary-general of the PD, the heir of the old PCI, finally manages to pass what neither Silvio Berlusconi nor Mario Monti managed to pass regarding the relaxation of the Italian labour market.