Italy's right-wing government earlier this week approved measures to boost job creation and workers' pay, amid hostile reactions from unions and opposition parties over accompanying welfare cuts and looser rules on short-term job contracts, reports Reuters. Prime Minister Giorgia Meloni made it easier for firms to offer job contracts lasting between 12 and 24 months and scaled back a ‘citizen wage’ anti-poverty scheme, with the aim of encouraging able-bodied people to look for work. The government also earmarked around €3 billion for a six-month cut in the so-called tax wedge, the difference between what an employer pays and what a worker takes home, but only for those earning no more than €35,000 per year. Tax cuts would on average amount to up to €100 euros per month, Meloni said.

As part of a drive to loosen labour market rules, the government increased the scope for using job "vouchers", an extreme form of labour flexibility popular among businesses, which critics say leave ample room for abuses. Italy’s move is in stark contrast to Spain’s path to labour reforms, where the centre-left government’s goal is to raise permanent contracts among young workers and reduce the use of temporary contracts.

Maurizio Landini, head of the main Italian union CGIL, criticised Meloni's package, saying wages in Italy were low due to high taxes but also because of an unprecedented ‘level of job insecurity.’ Under a draft seen by Reuters, Italy's government also decided that subsidies for poor people aged 18-59 will be cut to €350 a month, from a current average of around €550 per family, limited to a maximum duration of 12 months and subject to participation in job training schemes.