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Italy – IMF calls for radical labour market reform

22 September 2014

The International Monetary Fund (IMF) has issued a report stating that, based on major economic indicators, Italy needs to radically reform its labour market, reports Press TV. The financial body has urged Rome to implement revisions to its labour market laws, in a bid to generate new employment opportunities.

The development comes as the nation’s unemployment rate stands at 12.6%, the highest level since World War II, and is projected to remain above 10% until at least 2017. The inactivity rate among Italians aged between 15 and 64 years has recently been recorded at nearly 40%.

Last week, Prime Minister Matteo Renzi announced that he would force through changes to Italy’s labour laws, using special emergency measures, if Parliament dragged its feet on the reforms.

Mariano Bella, Director of Research for Confcommercio, the Italian General Confederation of Enterprises, Professions, and Self-Employment, commented: "Inactivity, defined as an unemployed not looking for work, is a structural problem in the Italian society. Relying on [the] official unemployment rate...is [just] misleading. The issue is that our economy continues to contract and unfortunately latest forecast shows that it won’t grow enough next year.”

The country's largest industrial employers' association, Confindustria, and the Organisation for Economic Cooperation and Development (OECD) both forecast the Italian economy will shrink by -0.4% this year.

Even though the IMF predicts the economy in Italy will grow by +1.1% in 2015, the OECD’s forecast shows that the Italian economy will barely recover within the next year, growing only by +0.1%.