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According to the Central Statistical and Economic Studies Service (Service
Central de la Statistique et des Études Économiques, Statec), GDP grew by
4.5% in 1999. The state budget for 1999 amounted to LUF 180 billion, and
registered a surplus of LUF 173 million. The state budget for 2000 is
approximately LUF 194 billion, with a surplus of LUF 138 million. This is
based on forecast GDP growth of 4.4% in 2000 (5% according to the OECD). The
public debt accounted for 4.6% of GDP in 1999, and inflation rose slightly,
to 1.89% in the year to November 1999.

In October 1999, a "quadripartite" meeting of those involved in Luxembourg's
sickness insurance funds was unable to agree on ways of balancing the funds'
deficits for 1999 and 2000. Thus, in November, the general meeting of the
Union of Sickness Funds took the decision to reduce certain benefits and
raise contribution rates. Trade unions have announced that they will be
seeking to have the decision reversed.

On 1 December 1999, Luxembourg's Minister of Labour blocked the registration
of a collective agreement for the banking sector signed by the ALEBA and UEP
trade unions, thus denying them nationally representative status. The unions
have announced that they will be appealing against this decision before the
Administrative Tribunal.

In October 1999, both the OGB-L trade union confederation and the Greens
political party called for the introduction of a sixth week of paid annual
leave in Luxembourg as part of a general reduction in working time. The
demand has been vehemently opposed by the Employers' Liaison Committee.

In November 1999, the government, company management and trade unions signed
a framework agreement on restructuring the Italian state railways (FS). The
agreement covers all the main areas of the crisis currently afflicting FS –
overstaffing, high labour costs, low profits and inefficient organisation –
in order to balance the company's books by 2005. The agreement was not signed
by the autonomous unions grouped in the Orsa umbrella body, which called a
24-hour national protest strike in December.

During 1999, there was little growth in the Italian economy – GDP rose by
1.2% in the first nine months of the year, according to the Italian
statistical office Istat. However, the government maintains that GDP growth
in 1999 shows that the Italian economy is recovering and should continue to
do so in 2000.

Shipbuilding in Italy presents a fragmented picture in terms of both
industrial relations and sectoral structure, with a polarisation between a
handful of medium to large companies (with Fincantieri being by far the
largest) and many smaller enterprises. At the beginning of 2000, an important
issue for the sector as a whole is that of the increasing weigh of
contracting-out, which is posing important challenges for trade union action.
For the companies involved in the construction of larger cargo vessels and
cruise liners, the decisions that the European Union and the Italian
government, respectively, will take on protecting the industry from Far East
competition and on the privatisation of Fincantieri will be particularly
significant.

In November 1999, Italy's Cisl trade union confederation organised a
demonstration against the government's economic and social policy, without
the support of the two other main confederations, Cgil and Uil. The
initiative marked the start of a new phase of "competitive unity" among the
unions, following the previous "unity of action" and attempts to create a
single union movement. The demonstration also led to divisions within the
Siulp police workers' union.

In November 1999, negotiations on certain aspects of the municipal budget
between the three major Italian trade union confederations - Cgil, Cisl and
Uil - and Bologna's municipal administration again ended with union
disharmony, following an earlier disagreement over an employment pact in
Milan. Cisl signed the agreement, Cgil withdrew from the negotiations and Uil
signed only a statement declaring its acceptance of the outcomes of the
negotiations

In November 1999, after an agreement among themselves, trade unions and
employers successfully asked the Italian government to modify some aspects of
the legislation on temporary agency work and to extend its possible use to
areas previously excluded by law - unskilled work and the agriculture and
building sectors.