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Portfolio > Economy & Markets > Economic Trends

Monti Reaches Deal on Italian Labor Laws

By Marlene Y. Satter

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Prime Minister Mario Monti has reached an agreement with the main political parties in Italy to back his plan to relax rules on firing workers.

Bloomberg reported Wednesday that in a Tuesday night meeting, the Democratic Party, the People of Liberty party and the Third Way alliance, which have backed Monti’s unelected government, came to an agreement with the prime minister to allow labor laws to be changed to make it easier for businesses to fire employees.

“At the end of the meeting, which had a positive outcome, the government and the political leaders made a commitment for an effective and rapid passage of the measure in parliament,” Monti’s office said in a statement.

The Democratic Party had been opposed to his plan to allow employers more freedom in firing workers during economic downturns; currently a judge can order reinstatement, and Monti wanted to eliminate that possibility. He may, however, consider modification of his plan to allow a court to order rehiring so that he can win the support of the party, according to a report in the Italian daily Corriere della Sera.

During an interview with La Stampa, Monti also contradicted an internal European Union report on Italy that said the country might need to deepen budget cutbacks in order to balance its budget in 2013. Even if the recession turned out to be deeper than anticipated, he said, no additional measures would be necessary.

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