December 3, 2014 / 7:04 PM / 3 years ago

Italy's Renzi wins confidence vote on labor market reform

ROME (Reuters) - Italian Prime Minister Matteo Renzi won a Senate confidence vote on Wednesday, empowering him to draw up labor reforms aimed at making a chronically sluggish economy more competitive.

Italy's Prime Minister Matteo Renzi gestures during a news conference at Chigi Palace in Rome March 31, 2014. REUTERS/Remo Casilli

Even though Renzi’s plans remain vague, they have alienated members of his own Democratic Party and enraged trade unions, who are holding a campaign of strikes against his pledge to ease restrictions on firing employees.

Scuffles broke out between police and demonstrators outside the Senate on Wednesday before the vote which the coalition government won by 166 to 112 in the 315-seat upper house of parliament.

Renzi, who is under growing pressure in Italy and in Europe to show that he can make good on reform promises, says when the changes envisaged by the so-called “Jobs Act” are introduced they will attract investment and help pull the country out of its third recession in six years.

Last week the European Commission postponed judgment on Italy’s 2015 budget until March, saying it wanted to see evidence that Rome was doing more to improve an economy that has shrunk by some 9 percent since 2007.

Italy’s unemployment rate of 13.2 percent is the highest since the country’s records began.

Renzi has frequently used confidence votes, which force the government to resign if lost, as a way of truncating debate and accelerating legislation.

The so-called “delegating bill” approved on Wednesday does not in itself change any labor laws but it gives the government a mandate to push ahead with labor market changes without then going back to parliament for final approval.

Renzi says he wants to make it easier for large companies to fire workers, reduce the number of temporary contracts and make jobless benefits available to more people, but it is still unclear whether he can find the money to extend benefits.

The USB trade union association said on its website it would continue to try to halt progress of the reform, “to prevent the cancellation of rights and safeguards that are the fruit of years of organized struggle by working people.”

Reporting by Isla Binnie; Editing by Gavin Jones and Robin Pomeroy

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