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Renzi’s Jobs Act is criticized by trade unions and entrepreneurs

by Italy24 staff

Premier Matteo Renzi is determined. He is going to speed up implementation of the labor market reform, even if this means provoking the ire of entrepreneurs, trade unions, some parts of the electorate and the extreme-left members of his own Democratic Party (PD).

For a start, Renzi’s government decided yesterday (October 7) to call a confidence vote in the Senate today on the draft legislation of the Jobs Act, which aims to boost Italy’s stagnant economy by making the labor market more flexible.

Next: the text of the reform will then arrive in the Chamber of Deputies in a “light” version, centered upon the main guidelines and principles of the reform, but falling short of introducing the specific measures removing job protection that have been the cause of so much controversy in Italy in the past few years, if not decades.

The procedures for firing workers, for example, will not be part of the text voted in the Senate today: this is the only way, a compromise, that might allow Renzi to accelerate the approval of this structural reform.

Renzi yesterday met the trade unions and the entrepreneurs, and he got criticism from both. The Jobs Act, in what IlSole24Ore called a “watered down” reform, contains changes that trade unionists and entrepreneurs do not like: but it is the only way to introduce more flexibility in one of the most rigid labor markets in Europe.

The text that will be voted on by the Senate today contains some last minute modifications that helped Renzi placate the most extreme left-wing members of his Democratic Party. But the text has been rejected in full by the CGIL trade union, which is farther to the left than the party.

The other two main trade unions, CISL and UIL, indicated yesterday that they might be open to negotiations. Renzi therefore was able to split the trade union front, which will be interpreted by the markets as a victory, a success of the prime minister.

In the last four years, Italy has attempted four different labor market reforms and none of them have been implemented because of opposition from trade unions.

As far as the business community is concerned, Renzi has been criticized and at the same time praised by the entrepreneurs: firms welcomed the introduction of greater flexibility in firing workers, but at the same time are worried that the changes needed to simplify the labor contracts might turn out to be weaker than expected.

Renzi’s Jobs Act has been acclaimed (welcomed) by the IMF and Germany, Europe’s largest economy and a strong player in the EU.