New president for Confindustria: a new phase in relationships between the social partners?

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Antonio D'Amato took over as president of Confindustria, the Italian employers' confederation, in May 2000. Mr D'Amato's inaugural address to the organisation's annual assembly, which launched an appeal for an "alliance for modernisation", has been viewed by numerous commentators as the beginning of a new phase in Confindustria's policy. The trade unions have been highly critical of some parts of the speech, in which union attitudes to welfare reform and the introduction of forms of work flexibility are described as "conservative".

Following the long process of designating the new president of the Confindustria employers' confederation (IT0003148N), Antonio D'Amato formally took over as head of the organisation at the annual assembly held on 25 May 2000. The new president received his mandate from the general assembly which, meeting on 24 May 2000 in closed session, elected him with 91.7% of the votes. Mr D'Amato, the first entrepreneur from the South of Italy to be appointed head of Confindustria, will remain in office for four years, until 2004. His inaugural speech, which reiterated points already expressed in his programme recently presented to the Confindustria executive committee (Giunta) (IT0005152N) was viewed by numerous commentators as signalling important changes in Confindustria's policy. One passage in the speech - which claimed that the trade unions have taken up an "objectively conservative position" in the debate on welfare reform and work flexibility - has provoked a row with the trade union confederations. In particular, Sergio Cofferati, general secretary of Cgil, has been highly critical of the opinions expressed by the new president of Confindustria.

Speech to the Confindustria assembly

In his address to Confindustria's annual assembly, Mr D'Amato launched an appeal for an "alliance for modernisation" which would unite government and social partners in an endeavour to support and reinforce the competitiveness of the Italian economic system in the face of the strong competitive pressures arising from globalisation and the spread of new technologies; an alliance for competitiveness which should enable Italian firms to compete on an equal footing with large multinational companies, dispensing with the old market rigidities and barriers to competitiveness. This form of "concertation", however, should abandon the logic of unanimous choices by which "if we cannot all do it, then no one can do it". The new president of Confindustria emphasised Italy's belated introduction of the structural reforms which he believes necessary to engender robust and enduring development, and he singled out areas in which Italy is lagging behind the other industrial countries: infrastructures, scientific research, innovation, employment, and growth rates.

The reforms

According to Mr D'Amato, of particular importance, if reform policies are to be viable, is the introduction of appropriate measures to ensure government stability and reduce state intervention in the economy. A wide range of reforms were mentioned in his speech (concerning public administration, privatisation and liberalisation, the pensions system, health and education, labour market, taxation, etc), but three areas in particular are considered crucial to giving the necessary impetus to concrete innovation: taxation, labour market and the welfare system. As regards taxation, Mr D'Amato called for a substantial cut in tax rates. He then went on to emphasise the need for greater labour market flexibility with "clear, certain rules not to be bargained over all the time". The achievement of significant employment growth in recent years (with 450,000 jobs created in 1998-9), thanks to the introduction of forms of flexibility (and "extremely modest" ones, according to the speech) regarding part-time work, fixed-term contracts and temporary agency work, marks out the route to follow and highlights the error of those who oppose these changes. In Mr D'Amato's view, the welfare system is unfair and hampers the competitiveness of firms and the wage levels of workers. Consequently, throughgoing reform is necessary, aimed at the creation of a "workfare" system, thereby fostering the match between labour supply and demand and sustaining the educational and research system. By means of these reforms, implemented by consistent and incisive government action, it will be possible to address such major problems as reducing the weight of the irregular economy and boosting the development of southern Italy.

The role of the trade unions

According to the new Confindustria president, in recent years the unions have hindered reform processes, especially the abovementioned crucial reforms of the welfare system and work flexibility, by putting unjustified vetoes on changes. He argued in particular that Cgil's opposition had "fragmented the traditional unity of the trade union front, which, in any case, is always ready to reunite as soon as the pensions system is mentioned". Mr D'Amato recognised the essential role of the unions in the achievement of important objectives like curbing inflation, but he considered their positions on welfare and flexibility to be "objectively conservative" and "corporative", because they protect groups who are "already sufficiently protected, rather than concerning themselves with those components of society that are truly vulnerable".

Concertation

Mr D'Amato reiterated his previously announced position on concertation, namely that it is not a goal in itself but a tool which may be useful to achieve the "alliance for modernisation" that he regards as essential. The method of social concertation (ie tripartite negotiation among government, employers and unions) is beneficial and important, said Mr D'Amato, just as conflict for its own sake is pointless. For this reason, concertation may facilitate the modernisation of the country and enable it to recover the competitiveness that it needs, more rapidly and more fully than the government and social partners may be able to do individually.

The European Union and the euro

The challenge of international competition mainly concerns Italy itself, Mr D'Amato stated, but Europe too has "economic rigidities" and "institutional shortcomings". In this regard, the introduction of Economic and Monetary Union has been an essential step forward, but it is still insufficient owing to the lack of a truly European economic policy. "Only a politically strong Europe will be able to be economically credible because it is more competitive, more modern, more innovative."

The reactions

The speech by the president of Confindustria was widely appreciated by employers and politicians. The comments of the latter have been substantially positive, albeit with some critical overtones on the left. A significant exception has been the Communist Refoundation Party (Rifondazione Comunista), which called Mr D'Amato's speech an expression of "liberalist extremism". Many observers, both employers and politicians, have pointed out that the speech may presage a more active posture by Confindustria, in that the employers' organisation may more clearly and forcefully demand the reforms that it regards as essential, calling on government and unions to assume their responsibilities in accelerating change, even at the price of possible ruptures.

By contrast, the Cgil, Cisl and Uil trade union confederations have been harshly critical of the speech. They reject both the description of their policy on reforms as "conservative" and what they see as an attempt to scale down the role of concertation. Sergio Cofferati, in particular, has rebutted the accusation of conservatism, saying that attitudes of this kind only exacerbate conflict and put industrial relations back decades, to the time of the social clashes of the 1950s. This "conflictual" interpretation of Mr D'Amato's speech by Cgil has not been changed by a letter sent by the Confindustria president to the La Repubblica newspaper in which he confirms the importance that concertation may take in the modernisation of the country, after the successes achieved in the fight against inflation and in the state's financial recovery. Cisl and Uil have both criticised the emphasis placed by Mr D'Amato's speech on reforming the welfare system, and pensions in particular, although they stress that Confindustria's stance should be assessed in the light of the facts - that is, in terms of how it behaves at the bargaining table. Sergio D'Antoni, the leader of Cisl, has stated that concertation cannot be regarded as merely a tool; rather, it should be pursued as a policy. At the same time, he has announced his willingness to begin discussions on work flexibility, especially if this is coupled with the introduction of forms of economic democracy in firms, like employee shareholding. In general, however, Cgil, Cisl and Uil have declared themselves ready to enter non-partisan dialogue on reforms and concrete proposals.

Commentary

The election of Mr D'Amato to the presidency of Confindustria has a number of features which signal a break with the past, most notably the fact that he is from the South of Italy and runs a medium-sized company. In certain respects, he may be able to stand as a figure highly representative of Italian business interests, taking on the claims of medium-to-small enterprises as well, which have repeatedly pressed for greater consideration in Confindustria's initiatives. At the same time, Mr D'Amato has set global competitiveness as a mandatory goal, and therefore with it abandonment of the Italian "small is beautiful" model - which he regards as too restrictive and limiting in many respects (thus provoking some criticism from associations representing artisans).

Although signs of innovation are apparent on the employers' side, the main potential discontinuities can be discerned in relations with the trade unions, or at least in the interpretations given by some commentators and the unions themselves to the first initiatives taken by the new president of Confindustria. Here, various issues are emphasised by different parties. First, there are those who point to a supposed new "interventionist" stance taken up by a Confindustria now more unwilling to engage in long-drawn-out discussions with the government and the unions. According to this interpretation, the government should intervene on important issues like pensions and work flexibility, even if the social partners fail to reach agreement, lest Italy's economic system irreversibly lose its competitiveness. Moreover, agreement with the unions should be functional in terms of achieving the objective of improved competitiveness, so that the importance in itself of agreement between the social partners would disappear. Second, there are those that emphasise that an attitude of this kind is in fact prejudicial to concertation, and it may give rise to practices designed to fragment trade union unity, or lead to unilateral and conflict-generating action.

The situation is complex, and appraisal of any effective change in Confindustria's stance with respect to the past can only be made in the light of its actual behaviour in bargaining rounds, and in concertation. Whatever the case may be, it seems that the new leadership of Confindustria is determined to place itself at the helm of an effort aimed at transforming the economy and particularly the labour market, through deregulation policies. The outcomes of this endeavour will largely depend on Confindustria's ability to keep bargaining relationships within the limits which are compatible with social dialogue, whose importance it recognises in general terms, while many of its specific features are criticised (Roberto Pedersini, Fondazione Regionale Pietro Seveso).