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New talks planned on pension reforms

  By: Fred Kapner and Gavin Jones
 Financial Times, July 8, 2002

 

 

The Italian government will this week restart talks with trade unions on pension reform, after scoring a significant victory on Friday in its battle to loosen the country's rigid labour laws.

The government wants to offer incentives for a private pension system that would complement the state system, one of the most underfunded in Europe. Italy spends 15 per cent of its gross domestic product on its state system and faces massive imbalances in coming years because of a rapidly ageing population.

"This will be the most important of our reforms and probably our most delicate talks," said one government official.

Negotiations on the private system and on increasing the legal retirement age had nearly ground to a halt in recent months while the government of Silvio Berlusconi, prime minister, focused on labour reform. But on Friday the government and two of Italy's three trade union confederations signed an accord making it easier for small companies to hire and fire workers and to offer temporary contracts. All three had broken off negotiations with the government in the spring and led a nationwide strike in April against its proposals.

Two of the three quickly resumed negotiations. Mr Berlusconi then overcame their resistance by backing down on some issues.


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