In one of Italy’s forgotten regions called Molise, south-east of Rome, there was little to celebrate at Easter. While family friends — aged from two to 92 — devoured home-made lasagne, roast lamb and traditional ricotta cake, the mood was sombre.

One business-minded son recently closed two supermarkets and filed for bankruptcy and another, an agronomist who advises local farmers, was left without a contract amid government cutbacks in this predominantly rural region.

“I am seeing families struggling to survive on a single wage of less than €1200 ($A1500) a month,” said their sister, a school teacher, with two children of her own. “With only one person working, they can’t make it to the end of the month.”

Prime Minister Mario Monti is pushing ahead with plans to reform the labour market but the dire economic situation has been underscored by a string of suicides across Italy that raise questions about the financial and personal risks.

A few days before Easter, the owner of a Rome construction company killed himself because his business was going broke and a 78-year-old woman jumped to her death in Sicily because her monthly pension had been cut. Two other men set themselves on fire in separate cities over economic issues and one of them died of his injuries yesterday.

According to the latest statistics, more than 2.4 million Italians or 9.3% of the workforce are now unemployed and young people are bearing the brunt of the crisis with one in three young people (32.6%) aged between 15 and 24 without a job. The future is so bleak , many young graduates are considering a move to France or Germany.

Monti is confident that his proposed labour reform will boost employment and head off a Greek-style debt crisis. The dour economist, who replaced the razzle dazzle of “bunga bunga” billionaire Silvio Berlusconi, heads a technocratic government that has already introduced tough cost-cutting measures and raised the retirement age.

The Prime Minister’s main focus now is Article 18 of the labour code, which currently means firms with more than 15 workers cannot sack their employees without risking legal action. On an official visit to Israel on Monday, he said the reforms were “balanced” and would make the market “more efficient” even though his popularity has dipped.

Under the Monti reforms now before Parliament, workers could be sacked either for “economic” or “disciplinary” reasons. But in a last-minute concession by Monti to centre-left leaders, if the courts rule that the “economic” lay-off is found to be unfair a worker could be reinstated and receive up to 27 months’ pay depending on age and seniority.

Giuseppe Ragusa, an economics professor at Luiss University in Rome, has welcomed Monti’s labour reforms but said far more is needed to kick-start the economy and attract investment.

“The great challenge for Italy is to find a viable way to generate growth,” Ragusa said. “Foreign investors are scared off by the complexity of the labour system and the bureaucracy, more than the fact that they cannot easily lay off workers.”

Monti may have forged a compromise with party leaders but employers are now dissatisfied with his changes and trade unions are considering national strikes to protect their rights.

“You cannot use economic reasons to sack someone, they have to have a legitimate reason,” said Susanna Camusso, the tough-talking head of Italy’s largest trade union confederation CGIL, which represents 6 million workers.

But Virgilio Pallini, president of  I.L.A.R. a family-owned distillery that exports liquor around the world,  dismissed the union complaints. “This is about a power struggle for the unions who want to control everything,” 77-year-old Pallini said in Rome. “It is comparable to Margaret Thatcher in Great Britain in 1984.”

Pallini’s company has 26 employees and he said he had always been able to sack whoever he wanted.

Beyond the reform of Article 18, Pallini said there was a far greater need to overhaul the bureaucracy, the justice system and an education system that was failing to produce what employers needed.

“It is very difficult to find the right candidate and the right mentality,” Pallini said, referring to his company’s recent search for an accountant. “I can find someone good and they say they don’t want to drive for one and a half  hours. In America people would happily sit on a train for 90 minutes to go to work.

“Here they are looking for work, hoping not to find it.  When I was a teenager I couldn’t wait to leave home. Here people stay at home until they are 35. It is their mothers who are the problem.”

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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