Italy's Monti wins confidence votes on labor reform

Reuters News
Posted: Jun 26, 2012 3:31 PM
Italy's Monti wins confidence votes on labor reform

ROME (Reuters) - Italian Prime Minister Mario Monti on Tuesday won the first two of four confidence votes called to accelerate the passage of his labor reform that has been criticized by both by labor unions and the business establishment.

The final two votes, and definitive approval of the reform, are due on Wednesday.

If the government lost one of the votes Monti would have to resign. But the prime minister is considered certain to win, as the main parties backing his technocrat government have already promised their support, albeit often grudgingly.

Monti's right-left coalition has grown increasingly uneasy with the prime minister as his popularity has dropped to 33 percent, less than half the 71 percent he had when he took office in November, according to an SWG poll.

Monti's predecessor Silvio Berlusconi, after meeting the prime minister for lunch on Tuesday, complained that three-quarters of the supporters of his People of Liberty (PDL) party do not approve of the government.

But Berlusconi said his party would continue to support Monti because out of a sense of responsibility amid the ongoing euro zone debt crisis.

Monti's labor reform was formally sent to parliament three months ago after weeks of negotiations with labor unions and employers, but it quickly ran aground as political parties sought to modify it.

The result is a watered down reform that trade unions criticize fearing an increase in lay-offs, that employers say will raise labor costs, and that many economists view as timid for a labor market that needs a major shake-up.

The difficulties of the labor reform marked the beginning of Monti's political troubles and accelerated his slide in the polls that had started when the tough austerity measures he passed last year began to take hold.

Monti last week asked his political supporters to pass the reform to bolster his political credibility before negotiations on the future of the single currency at the European Union summit on Thursday.

The legislation aims to ease firing procedures, broaden unemployment benefits from 2017 and end abuses to temporary hiring schemes that allowed employers to avoid taking on full-time workers.

In order to get the law passed before the summit, Monti told parties he would introduce some corrective measures separately in coming months.

(Reporting by Steve Scherer; Editing by Andrew Heavens)