Business

Italian firms praise economic changes

Italy's unions are planning a campaign of industrial action against proposed labour market changes, which Prime Minister Mario Monti says are crucial to convincing creditors the country is serious about change.

Businesses say the new employment laws will allow them to hire more people, and insist Italy cannot afford to reject them.

If Mr Monti has a vision for Italian business, it may well look like the printing equipment and paper firm Omet in Lecco, Italy's most industrial region.

Omet has customers on every continent, with three-quarters of them outside Europe.

They company has been growing by at least 10% a year for the past decade.

It employs almost 200 people and is about to open a new facility close to its existing factory.

But the company's president, Antonio Bartesaghi, says the success of the past few years has been won in spite of the Italian government, rather than enabled by it.

Mr Bartesaghi is glad to see technocrat Mr Monti at the helm and is celebrating the prime minister's latest set of changes.

Flexible labour market

Mr Monti plans to relax an employment law, Article 18, which requires companies to rehire people they have dismissed if the courts deem it to be without "just cause" - which they often do, at the expense of the employer.

Image caption Companies and unions disagree about who should be the most powerful on the shop floor

Businesses say it is a huge disincentive to offering long-term contracts.

Mr Monti says it has created a two-tier labour market, with younger workers predominantly on short-term contracts that offer no career progression.

If Mr Monti's changes are passed into law by parliament, Mr Bartesaghi says he will take on 20 new people immediately.

"We miss opportunities if we don't have the courage to hire people," he says - pointing out that many companies are concerned about taking on staff "because when we do it's more difficult to separate from them than it is to separate from a wife. That's crazy.

"Giving more flexibility to the labour market is a way to let companies hire more people, invest in training, invest in those people who have good potential for growth.

"We're just asking for that flexibility and that help, which our international competitors have had for many years."

'The markets are watching'

Confindustria, Italy's biggest business lobby, is backing Mr Monti's latest proposals.

But the lobby group's president, Emma Marcegalia, says they would have liked the government to go further.

If the Italian parliament makes these plans law, Italian workers will still be among the best protected in the world, Ms Marcegalia says.

"Now the real problem is the parliament," she says.

"Our fear is that MPs will dilute the reforms. That would be very bad because the markets are watching us and any weakness will look very bad.

"Labour market reform is the symbol of willingness to change in Italy. And we have to keep on this path of structural reform. We need to cut public spending, and invest more in training, research and innovation."

'Frightened workers'

But for Italy's unions relaxing Article 18 is a symbol of destruction, driving a knife through the heart of workers' rights.

Image caption Mr Monti's plans are welcomed by firms but rejected by the unions

At the Milan headquarters of CGIL, Italy's biggest union, the posters are out, rallying members to fight the changes.

They are planning an eight-hour general strike later this month.

"We will strike, we will fight," says Marcello Scipioni, who is secretary of Milan's metal workers union.

"This law doesn't create more jobs. It just reduces the power of workers.

"Mr Monti is simply wrong. We have to look at what, for example, Mr Obama is doing in the US - using public money to support the economy, not cutting rights and wages and benefits.

"They want to have workers who are afraid, and we don't want frightened workers. It's a fight about power in the workplace."

'Dynamic careers'

For many of Italy's young people, this struggle over employment law might seem irrelevant.

Some 30% of young Italians are unemployed, and those with work are generally on short-term contracts.

Image caption Italian firms say economic change will result in job creation, but many workers refuse to believe them

They are unlikely to get any of the security or the protected jobs for life that their parents' generation has enjoyed.

Labour market changes will force young Italians to change their view of work, abandoning the quest for a job for life in favour of a more dynamic career, according to Emiliano Novelli, an online entrepreneur who organises networking and recruitment events at Italian universities.

"They have to take a job at the first company they can find," he says.

"They shouldn't think they have to find a job for life. Then they have to change, they have to discover what they want to do, what their dreams are.

"They have to understand that in Italy we do have opportunities. They can be entrepreneurs. If you can dream it you can do it, as Walt Disney said."

And that is where the Italian debate about the labour market takes you - from legal technicalities to soul-searching and dreams.

For Italians, it is as much about cultural change as structural reform.

For Mr Monti, it is his biggest test yet.

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