Abstract

Under the pressures of the criteria for the EMU, Italian administrative and fiscal reforms have been directed by the Center-Left governments and technocrats during the 1990s. They have obtained legitimacy through the tripartite agreements (“social pacts”) signed by the Government, the employers' federations and the labor unions.Despite many provocative statements made by “Eurosceptic” ministers, Berlusconi Government has syntonized the domestic labour market reforms to the EU's targets of occupation rate, following the “White Paper on Labour Market” drafted by the labour law experts including prof. Biagi, the assassinated “pro-Europe” consultant of the minister of Labour. The focus of the arguments is the Article 18 of Labour Rights Act, which guarantees rehiring and compensations to workers dismissed without just cause. The new social pact, the “Pact for Italy”, which partially loosens the rigidity of the Article 18, was signed by the Government and major social partners except the CGIL, Italy's largest left trade union. This means a partial collapse of the “concertation” of the 1990s.The “Pact for Italy” also demands to augment domestic investment especially to the Mezzogiorno, the less developed southern half of Italy. Between the domestic pressure to public spending and the external requirements of the EU's Stability and Growth Pact, Italian Center-Right government must seek a difficult balance of public finance. The Center-Left opposition is missing the opportunities to indicate the alternative way for reforms by the internal split between the moderate center parties and the Left activists of the “girotondo” (human-chain demonstration) movement.

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