On 22 March 2007, talks began between the government and the social partners on some of the main points in the economic and industrial policy that the centre-left majority intends to implement in the next few months. However, the possibility of reaching agreement quickly, as intended by the government, is jeopardised by some particularly delicate issues, primarily that of reforming the pensions system.
A meeting convened on 22 March 2007 by the President of the Council of Ministers, Romano Prodi, initiated talks between the government and the social partners on some of the main measures which the centre-left majority intends to introduce over the next few months. These measures aim to boost Italy’s development and cohesion.
The convocation of the meeting comes after repeated calls for tripartite talks by the trade unions and employer organisations. The intention of all the actors involved was to reach agreement by June, prior to the publication of the national budget report (Documento di Programmazione Economica e Finanziaria, DPEF).
The government would like to see a joint solution reached on the following three principal areas.
On this issue, the government’s main objective is to restore Italian economic growth at rates that remain steadily above 2%. For this purpose, certain ‘levers’ have been identified:
The aim of this objective is to enhance the quality of services in public administration and reduce their costs, by:
This area of intervention has been identified in order to provide greater protection for those people who are widely regarded as the ‘weak ring’ in the Italian labour market, namely young persons, women and people aged over 50 years. The government intends to deal simultaneously with issues concerning pensions, workers’ protection and the labour market.
‘Concertation committees’ will be organised for each of these three areas requiring attention. The Minister of Labour and Social Security, Cesare Damiano, declared that ‘the concertation will follow a logic that keeps all the committees united’, and ‘although it is sometimes advisable to address issues of a specific character separately, the objective of a joint conclusion remains, so that we can maintain maximum consistency in dealing with the problem of distributing the resources available among the various committees and the various issues’.
The issue of financial resources is closely connected with the €10 billion that the Minister of the Economy and Finance, Tommaso Padoa Schioppa, announced to be the surplus on the revenues foreseen by last year’s DPEF.
Mr Padoa Schioppa declared that Italy has overcome the emergency in its public accounts, although the economy has not yet been fully restored to full health. He announced that, of the surplus €10 billion, €7.5 billion will be allocated to a further adjustment of the public accounts equal to 0.5% of gross domestic product (GDP), while the remaining €2.5 billion will be used to finance the actions decided by the ‘Protection, labour market, and social security’ committee and the ‘Productivity and competitiveness’ committee, regarding second-level bargaining.
The financial resources necessary to cover the other action points of the ‘Productivity and competitiveness’ committee will be retrieved from current public spending; these resources will derive from reforms or spending cuts.
Finally, the resources for the ‘Modernising public administration’ committee have already been earmarked in the last budget law (as regards agreement renewals) and they will not be supplemented.
The general climate surrounding the government’s initiative has been positive but, as many commentators have pointed out, discussions on the issues highlighted will not be straightforward. The most difficult issue indubitably concerns the reform of the pensions system, about which the Secretary General of the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), Guglielmo Epifani, has already announced that ‘the talks are going to be tough’. A similar comment has been made by the Secretary General of the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana dei Sindacati dei Lavoratori, Cisl), Raffaele Bonanni; although he considers Mr Prodi’s speech as ‘a good basis for discussion’, Mr Bonanni has announced his union’s opposition to the government’s plan to reform the pensions system. With regard to social security, Vice-President of Confindustria Alberto Bombassei has commented that ‘a formula that satisfies everybody does not exist; everything is fine for us, provided that it is at zero cost to the public finances’.
Discussions on public administration also promise to be controversial, with the trade unions announcing strike action in this regard. Although the parties signed a memorandum on public employment and the reorganisation of public services (IT0702039I), they have still failed to reach agreement on the pay-related part of the renewal of the national collective labour agreement (Contratto Collettivo Nazionale di Lavoro, CCNL) for civil servants which expired 17 months ago.
The attempt to return to concertation as a method for governance of Italy’s industrial and economic policies undoubtedly marks a clean break with the recent past of the right-wing government under the leadership of Silvio Berlusconi. Nevertheless, the outcomes of the talks are by no means conclusive. In fact, numerous questions still remain for discussion, and the effort required from the social partners, especially from the trade unions, may prove to be excessively onerous. The matters on which it seems most difficult to reach agreement are the pensions system and the renewal of the pay-related part of the CCNL for civil servants. In terms of the pensions system, the proposals that Minister Damiano intended to put forward to the social partners were rejected from the outset by both the social partners and members of the government itself. The situation relating to the CCNL seems less difficult to resolve.
In relation to the discussion on the industrial relations model, incentives for Company performance-related bargaining are certainly important ways of increasing labour productivity, which has significantly diminished in recent years, and to relaunch the Italian economy. However, broader action will be necessary to increase the system’s overall effectiveness. On this point, proper discussion has yet to begin, and even though numerous actors are pushing in this direction, it is difficult to merge the proposals into common goals (IT0508307F, IT0508206F, IT0412306F).
Another critical point in the government’s initiative concerns the time scale for implementing the various measures. Although, as Minister Padoa Schioppa has underlined, ‘history teaches that there have been vital negotiations that lasted for a few days or a few weeks’, it is unlikely that agreement will be reached in the timescale envisaged, given the disagreement between the parties on certain issues of central importance.
Edoardo Della Torre, Ires Lombardia