Monti presses labor reform despite union challenge

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By COLLEEN BARRY, Associated Press

MILAN (AP) — Mario Monti is facing his biggest challenge since becoming Italy's prime minister last November as the country's largest labor union plans a series of strikes against a package of labor reforms.

Monti is pressing ahead with the reform package — which include measures that will make it easier to fire workers — despite objections from the CGIL labor confederation. The premier entered a final round of talks on the reforms in Rome on Thursday before seeking Cabinet approval by the end of the month.

Details of the package — his third major initiative since taking office as the head of a government of technocrats late last year — were expected to be released on Friday.

As well as pushing ahead with a raft of austerity measures to get a handle on the country's high debt, which is the second-highest in terms of national income in the 17-country eurozone behind Greece, the Italian government is enacting a wide-ranging economic reform program to boost long-term growth.

CGIL leader Susanna Camusso said she will announce dates for an 8-hour general strike and a day of protests against the measures as soon as the details of the reforms are known. But unions in her federation were already staging smaller actions.

Some 800 aerospace workers blocked traffic in central Turin on Thursday to protest changes to one of Italy's established labor laws, a decades-old ruling that grants workers broad protections against losing their jobs.

The government wants to do away with measures that would allow a court to force a company to reinsert employees fired for disciplinary or economic motives, if the employer's case is not proven in court when challenged. Rather than forcing the company to take the workers back, the judge would be limited to ordering payoffs of 15 to 27 months' pay.

The proposed changes have been backed by Italy's industry confederation — but with reservations about the 27-month upper limit — and most trade unions. However, the CGIL, including its most radical union FIOM, is staunchly opposed.

"We are facing a government that is making workers and pensions pay the true costs of the initiatives," Camusso said Wednesday.

The reform also includes measures aimed at making it easier for young people to get work, raising temporary workers' wages and introducing a system of unemployment compensation to replace one that allows companies under financial distress to temporarily lay off workers. But it is the one proposal loosening rules on firing that is the lightning rod for political discord.

"The proposed labor reform needs to be seen in its entirety," said Economic Development Minister Corrado Passera. "It is an operation of great balance and great wisdom."

Parties on the left, such as the Democratic Party, are under considerable pressure because the measures could weaken their traditional base in the next general elections, which are expected next spring when the Monti government wraps up its term.

Politicians are pledging to make amendments when the measures reach parliament.

"I don't think Monti can say to the Democratic Party to take it or leave it," party leader Pier Luigi Bersani said late Wednesday. "I don't think Monti would do it, and it is clear that we will vote when we are convinced, he needs to reason with us."

Monti's government has already won over the support of European partners and helped persuade investors that Italy will get is heavy debt load under control. That's most evident in the country's borrowing costs, which have fallen sharply over the past few months. Late last year, the yield on Italy's ten-year bonds was over 7 percent, widely considered to be unsustainable over the long term. Now it's back around the 5 percent mark.

Though much of the credit for the improvement has been given to a big long-term liquidity operation from the European Central Bank, there is growing confidence in the Monti government to deliver on the austerity and reform package, especially when compared to the government of his predecessor Silvio Berlusconi.

Monti's government previously passed austerity measures as well as a package of liberalization reforms, which passed a vote of confidence in lower house on Wednesday.

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