Social partners agree measures to promote growth and employment

In September 2013, the Italian employer’s association Confindustria and the three main trade union confederations reached agreement on three key issues to be addressed to promote economic growth, employment and industrial development in Italy. The issues are reform of the tax system, better support for Italian industry, and a review of public administration and spending. The government has approved the proposals and will open discussions with the social partners.

Background

In a joint report, Legislation for stability in jobs and growth (in Italian, 512KB), the employers’ association Confindustria and Italy’s three largest trade union confederations – the General Confederation of Italian Labour (Cgil), the Italian Confederation of Workers’ Unions (Cisl) and the Union of Italian Workers (UIL) – have asked the government to take specific action over the next few months to create employment, economic growth and industrial development in the three key areas of fiscal policy, industrial strategy and public spending.

Fiscal policy

The signatories of the agreement say that reform of the tax system is crucial to stimulate investment, improve productivity and encourage technological innovation in business, and that it must be an important part of any new industrial strategy. More specifically, Confindustria and the trade union confederations want to:

  • reduce the tax burden for workers and pensioners to make more surplus income available for increased consumer spending;
  • review business taxation to promote production;
  • make permanent the current experimental measures that have reduced taxes and social security contributions to increase labour productivity;
  • fund tax reductions through tougher measures against tax evasion.

Industrial strategy

The social partners propose a national working group to focus on the crisis that businesses in Italy are facing. It should involve the government, all social partners and other key actors such as banks and municipal, regional and provincial authorities. The working group's aim should be to identify appropriate measures and solutions. The social partners have identified four strategic issues that are crucial for the future of Italian industry. The first of these is increased investment to promote innovation and industrial competitiveness, including:

  • the introduction of an automatic and stable measure of tax relief for enterprises investing in research and development;
  • a strategy in line with the European programme of research and development for enterprises (Horizon 2020);
  • the creation of a public guarantee mechanism to favour the participation of the financial system in the funding of important industrial innovation projects.

The second issue is to establish a green economy to guarantee a better balance between industrial production levels and the protection of health and the environment by:

  • creating a plan to support energy efficiency and the development of renewable forms of energy within the Italian industrial system;
  • intervening to consolidate and further develop production processes that incorporate the recycling of primary materials from waste.

Thirdly, new forms of financing for industrial development to encourage investment are crucial, such as:

  • the strengthening of support mechanisms that help businesses access credit;
  • the setting up of a fund for industrial reorganisation to help enterprises that are in difficulty but could be developed.

Finally, reduced energy costs to improve the competitiveness of Italian enterprises at European and global level are necessary.

Public spending

The social partners say they believe a selective analysis of spending at all government levels, including central and local authorities, is essential. They suggest that the government could modify Article V of the Constitution to allow the state to intervene jointly in some matters of general interest, such as energy, communications and foreign trade. They also say there is an urgent need to make sure that public spending is revised to guarantee services of the highest quality to citizens and enterprises.

Government position

Italian Prime Minister Enrico Letta has said he approves of the document and will work on the proposals suggested by the employers and trade unions. He has stated that discussions between government and the social partners will commence in the near future.

Sofia Sanz, Cesos

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