Italian Prime Minister Matteo Renzi said yesterday that he would force through changes to Italy's labour laws with special emergency measures if parliament dragged its feet. He also rejected criticism that his government was moving too slowly with its reform agenda, reports Reuters.

Mr Renzi, under growing pressure to back his promises with action, said that reforms to an unjust labour system that divided Italian workers into "first division" and "second division" categories would be at the heart of the programme.

He said the government would work with parliament to cut through the thicket of regulations covering employment, provided the reforms could be passed soon, but indicated he could also push through a special decree of his own.

"Otherwise, we are ready to intervene with emergency measures, because when it comes to jobs, we can't waste another second," he said in Parliament.

With youth unemployment running close to its highest level since the 1970s at around 43% and the economy in its third recession since 2008, stimulating job creation is an urgent priority for Mr Renzi, who has promised a sweeping "Jobs Act" in the coming months.

The grim climate he faces was underlined by forecasts from employers' lobby group Confindustria, which predicted that the economy would contract by -0.4% this year, matching a forecast from the Organisation for Economic Cooperation and Development (OECD).

Confindustria forecast that Italy's huge public debt will climb to 137% of economic output this year. That is almost +25 percentage points higher than the forecast of 112.6% than an earlier forecast in 2011.

Mr Renzi, who has promised spending cuts of around €20 billion next year to ensure Italy respects EU budget rules, said the next budget planning document, due next month, would contain resources to simplify and reinforce welfare measures for workers who lost their jobs. He added that the government would cut payroll costs for companies.

The address to Parliament came in response to growing criticism that Mr Renzi's government had made little progress with the reforms it promised when it came to office in February. In his speech, which lasted just under an hour, Mr Renzi offered few specifics.

Renato Brunetta, floor leader of Silvio Berlusconi's opposition Forza Italia party, said Mr Renzi had offered no more than "empty words and hot air".

Successive Italian governments have promised to reform a labour market that guarantees extensive rights to workers on full-time, open-ended contracts but leaves an increasing number in (supposedly) insecure, temporary jobs with little protection.

Mr Renzi offered little detail about the labour reforms he is proposing but he has been careful to avoid a battle over the symbolic issue of Article 18 of the labour code, which protects workers in larger companies from unfair dismissal.

The actual significance of Article 18 is much disputed, with many economists pointing out that it affects no more than a few thousand workers every year. But it has become a totemic issue both for unions concerned about worker rights and for centre-right politicians who see it as a symbol of the inefficiencies of the labour market in Italy.

Implicitly rejecting criticisms that the government had focused too much on constitutional reforms rather than measures to revive the economy, Mr Renzi said change had to come on a broad front: "Either we get all the reforms done together or we won't get past the snail's pace that has stopped us growing for 20 years.”