2000 NAP for employment approved

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In June 2000, the Italian government approved its 2000 National Action Plan (NAP) for employment, in response to the EU Employment Guidelines. Economic growth, especially in southern Italy, training, reform of the labour market, and curbing labour costs are considered to be the main priorities for job creation.

Between the end of May and the beginning of June 2000, two important analyses of the state of the Italian economy were published: the annual report of the governor of the Bank of Italy (Banca d'Italia), and the Organisation for Economic Cooperation and Development (OECD) report on Italy. The reports depict a situation with both positive and negative aspects.

On the positive side is a tendency towards economic revival in relation to 1999, as indicated by the 2.9% GDP growth rate predicted by the OECD for 2000. However, the governor of the Bank of Italy, Antonio Fazio, highlighted a number of factors which hamper the competitiveness of the Italian economy: insufficient innovation by firms; heavy fiscal pressure; the rigidity of the labour market; a lack of infrastructures, particularly in some areas of the country; and the inefficiency of the public administration. The OECD report, too, emphasises the need for reform of the pensions system, the labour market, and taxation.

In the area of employment, the most significant feature highlighted by the reports is the growth in employment levels (up 1.4% in 1999). Moreover, since the second half of the 1990s the structure of employment has changed, with a progressive increase in "atypical" forms of work (part-time work, temporary agency work and fixed-term contracts). Marked geographical disparities in employment and unemployment still persist.

The 2000 NAP

On 2 June 2000, the Italian government approved its 2000 National Action Plan (NAP) for employment, in response to the EU Employment Guidelines (EU9909187F). Following the Guidelines, the NAP covers four main "pillars":

  1. improving employability
  2. developing entrepreneurship;
  3. encouraging adaptability of businesses and their employees; and
  4. strengthening equal opportunities policies for women and men.

Employability

A fundamental measure for the improvement of employability has been reform of the job placement system, which the government expects to complete by 2003, and an increased use of active employment policies (IT0005355F). Another element is reform of the training system. The government expects that compulsory training up to the age of 18 (IT9812334F) will come into effect by 2002. Apprenticeships will become one of the main instruments for providing skills to young Italians. In the training field, particular efforts will be devoted to developing the skills required by the so-called "new economy". There is a skill shortage in this sector amounting to an estimated 50,000 workers.

Entrepreneurship

For the purpose of creating and consolidating firms, especially in the south of Italy, priority is given to the simplification of administrative procedures. Moreover, in southern Italy the aim of the government is to lower the cost of labour by reducing social security contributions and taxes. However, the government intends to discuss this proposal with the European Commission, which believes that measures of this kind cannot be introduced in a differentiated manner within the territory of a particular country, since they are tantamount to state subsidies which are in breach of competition rules. Also with regard to the development of southern Italy, the government intends to continue with its campaign against illegal clandestine labour by means of regularisation and "gradual alignment" agreements (IT9903244F). In order to foster the growth of entrepreneurship, the government has confirmed the use of grants and tax concessions for the creation of firms by unemployed people and women.

Adaptability

As far as adaptability and labour market flexibility is concerned, the NAP emphasises the importance of part-time employment, especially since its recent reform (IT0002261F). The use of temporary agency work is also increasing (now representing 0.7% of the active labour force), and further growth should result from the recent extension of the possibility of using temporary agency work to low-skilled workers and in agriculture and the construction industry (IT9912135N).

Equal opportunities

The main instruments identified in the field of equal opportunities policies, in order to encourage the growth of female employment, are the development of entrepreneurship and part-time work. Moreover, the recently enacted law on parental leave (IT9910347F) and tax relief for families introduced by the 2000 budget law should make it easier to reconcile work and family commitments.

Reactions

Although the social partners agree with the overall approach taken by the NAP, they have voiced some criticisms and doubts, inviting the government to give greater urgency to reform of the job placement system, of the system of "social shock absorbers" which ease the blow of redundancies (IT9802319F), and of the public administration. The employers' organisations, and Confindustria in particular, have emphasised the importance of reducing the cost of labour throughout the country. The trade unions for their part have stressed the need for discussion between the government and the social partners on "atypical" work which would bring the ongoing legislative process to a more rapid conclusion (IT9709310F). The Cisl union confederation has accused the government of ignoring its proposals for geographically-based wage flexibility - an issue which has caused considerable controversy among the unions, and especially between Cgil and Cisl (IT9909345F).

Commentary

The guidelines laid down by the 2000 NAP are consistent with those of the 1999 Plan (IT9905115N). They take account of both the characteristics of Italian unemployment – the fact that it mainly affects young people and women, and the marked geographical differences – and the EU Guidelines.

A crucial issue in Italy is the development of the country's southern regions, for which the priority goals are considered to be economic growth, the development of entrepreneurship and the regularisation of underground or irregular work. It is more difficult to identity the means by which to achieve these goals, especially in view of the positions taken by the European Commission (for example, in the abovementioned case of reduced social security and tax contributions for southern Italian firms).

In general, the NAP for employment hinges on supply-side policies, given the importance assigned to training, the spread of "atypical" employment contracts, active labour market policies, and reducing the cost of labour. These, however, are policies which use a set of instruments not directed exclusively at deregulation, but which seek to foster flexibility in its various forms.

It emerges from analysis of the NAP that labour market policies are an area in which profound reforms have been enacted in Italy over the past decade, but that these reforms are being implemented with difficulty and delay. (Marco Trentini, Ires Lombardia)

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