Social partners sign first agreement for the reform of the welfare state

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An agreement between the Italian Government and the three main trade union confederations - Cgil, Cisl and Uil - to transfer the costs of social security from the Inps fund to the general tax system was reached on 1 September 1997.

Talks between the social partners and the Government on the reform of the welfare state (IT9707122N) started up again in the last week of August 1997. The negotiations concern all welfare policies in Italy, though tension between the trade unions and the Government is focused on the latter's proposal to make changes to the pension system.

The main aim of the negotiations on pensions is to reduce the deficit of the pension scheme, a reduction deemed necessary in order to keep the public deficit within the parameters of the Maastricht Treaty on European Union.

Trade unions have voiced their willingness to reform the pension system on condition that the funds paid by workers will not be used to cover the costs of benefits to those dependent on social security, which will instead be financed by the tax system. This operation has been defined as the "separation of compulsory pensions and social benefits", and concerns, in particular, several specialised pensions for which some laws have set higher benefits than those paid by the interested parties.

The agreement between the Government and unions concluded on 1 September 1997 is above all concerned with:

• pension costs for farmers;

• pensions for disabled people; and

• all the debts that the National Institute for Social Security (Istituto Nazionale di Previdenza Sociale, Inps), which manages the obligatory pension system in Italy, had accumulated to meet these costs.

By putting the agreed measures into action, Inps should see a reduction in the yearly deficit from ITL 21,920 billion to around ITL 9,000 billion.

Representatives of the Cgil, Cisl and Uil union confederations have expressed their satisfaction with the results, which significantly reduce the imbalance in the pension system and cut the deficit which must be achieved by the revision of the whole system.