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Decoding Matteo Renzi’s Job Act

Although it got a not so warm welcoming in Italy, the new PD plan was well received in Europe

Decoding Matteo Renzi’s Job Act

Claudia Astarita

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During the last few days, Italy has been talking a lot about the new "Job Act" launched by the new centre-left Democratic Party (PD) leader Matteo Renzi.

Since Italy recently registered another record high in term of unemployment (12.7 per cent) and especially youth unemployment (over 41 per cent), Renzi started discussing his own reforms package to contain this problem.

Some analysts believe that Renzi's move may become a dangerous threat to the administration's solidity. Indeed, the new PD plan has been viewed more as an agenda for the current executive lead by Enrico Letta rather than a new attempt to find a way (and a sustainable end effective strategy) to fight unemployment.

Actually, it is worth highlighting that at the moment Renzi's Job Act is a draft rather than a detailed proposal, as indeed it still needs to be discussed during the forthcoming party meeting scheduled for the 16th of January. Accordingly, ideas, criticism and comments continue to be more than welcome to strengthen and improve the original draft.

Generally speaking, Renzi aims at simplifying the Italian labour system, limiting the number of word contracts available, as well as reducing lay-off benefits. Further, considering that now in Italy job protection is something characterizing senior rather than younger workers, the new Job Act is considering the idea of introducing a "single employment contract" whose job protection measures will be growing with seniority.

Beyond that, and aware that most of firms say they don't want to hire as they find it too difficult, if not impossible, to fire their workers when they need to, the new PD plan has proposed to counterbalance the easing of hiring and firing rules with the strengthening and a more efficient distribution of unemployment benefits.

The European Employment Commissioner Laszlo Andor welcomed the Job Act stressing it goes "in the direction hoped for by the EU in recent years, [that is] making the job market more dynamic and inclusive by tackling the sensitive issues of youth unemployment and the employment of women."

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