Italy calls confidence votes Tuesday on labor reform

Reuters News
Posted: Jun 25, 2012 2:42 PM
Italy calls confidence votes Tuesday on labor reform

ROME (Reuters) - Italy's government has called four parliamentary confidence votes on its contested labor reform in order to win approval before Prime Minister Mario Monti attends a European Union summit in Brussels on Thursday.

Minister for relations with parliament Piero Giarda announced the votes on various articles of the legislation, to cut short parliament's examination of the package which was presented by the cabinet in March.

Three of the votes will be held in the Chamber of Deputies on Tuesday, and the final vote, and definitive approval of the reform, is due on Wednesday.

Monti is considered certain to win the votes, as the main parties backing his technocrat government have already promised their support, albeit often grudgingly.

If the government lost one of the votes Monti would have to resign, but this is considered only a theoretical possibility.

Angelino Alfano, national secretary of former Prime Minister Silvio Berlusconi's People of Freedom party (PDL), said the PDL disagreed with "a great deal" of the reform and this would be "the last time we support measures we are not convinced by."

The legislation proposes easing firing restrictions, discouraging the use of temporary contracts and gradually handing out unemployment benefits to more people.

It has been criticized by trade unions who fear a rise in lay-offs, by employers concerned about higher labor costs, and by many economists who say it would make only marginal changes to a rigid labor market that needs a major shake-up.

The unions have already held several strikes against the proposed changes.

Monti asked parliament last week to hasten passage of the package "so that the European Council on June 28 can take note of the passage of this important structural reform."

Monti replaced discredited former prime minister Silvio Berlusconi in November as the recession-hit country teetered on the edge of a Greek-style default, and passed a tough austerity package to try to restore investor confidence.

The measures, including 24 billion euros in new taxes for this year alone, pushed down Rome's borrowing costs for a time. But concern over the future of the euro zone has pushed benchmark bond yields back up to around 6 percent.

At the same time, the prime minister's approval rating has slumped to below 35 percent from around 70 percent when he took office, according to recent polls.

(Reporting by Gavin Jones; Editing by Tim Pearce)