Confindustria calls on the Government to speed up structural reforms

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At its annual assembly in May 1997, Confindustria, the main Italian employers' confederation, kept up its pressure on the Government to make changes to the welfare and social security system.

EU Economic and Monetary Union (EMU), reviewing the 1992-3 income policy agreements and welfare reform were three key points stressed by Confindustria's president, Giorgio Fossa, at the employers' confederation's annual assembly, held in Rome on 22 May 1997. The Prime Minister, Romano Prodi, also gave his views to the meeting.

On the subject of EMU, Mr Fossa told the assembly that: "from now to this summer, Italy must decide if it wants to be able to honour its commitment and if it will consequently participate in the European monetary system right from the start." The Maastricht Treaty "is not only a statistical gamble on more or less difficult-to-reach parameters. It is a very important policy gamble founded on clear economic, financial and market rules". Recovery and the development of the Italian economy - says Mr Fossa - have to be "the same thing", and "they can be achieved if, overcoming the rigidity of the labour market, the opportunities offered by the globalisation of markets are taken up, and if the Government fixes the objectives of the economic recovery clearly, is credible in its decisions and determined to follow them up".

Concerning the incomes policy agreements of 1992-3, Mr Fossa said that such agreements had provided "the basis to push up inflation", adding: "revision of these agreements must avoid allowing inflation to go up again. I would like to remind the trade unions, and even our associations, that in our competing regions the industrial inflation rate is zero and that this will have to be our objective too. Many enterprises will also have to make profits through reducing prices if they want to continue to invest and grow in the global market. This means that they will have to reduce costs. The revision of the July 1993 agreement cannot be just a simple refining process, it will have to become a new stage in industrial relations."

The Confindustria president then went on to highlight the need for the structured reduction of public expenditure and welfare reforms. He said that comparisons on public expenditure with other European countries refer to data of three years ago, and "do not take into account the reductions that the other countries have already managed to make and are in the process of making", and complained about the unsuitably exaggerated cost burden on enterprises. Mr Fossa then repeatedly affirmed the effort to speed up the structural interventions to reduce public deficit.

In his speech to the assembly, the Prime Minister reaffirmed the Government's effort to make the reforms, though "without being over-impatient", as the task of making changes requires the consensus of the Italian people, and to obtain this there must be mediation between different interests. Welfare reform (IT9703303F), whose centre-piece will be the reorganisation of the pensions system, "will have to be negotiated with the social partners in 1997, thus allowing it to come into effect in 1998".

The trade union representatives present at the assembly criticised Confindustria's plans, above all for the proposals to cut social expenditure.