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In Italy, Stifling Labor Laws Inhibit Growth
Keywords:
Tags: Italy,
Italy's labor laws and the impact on business activity
06/11/2011
Most businesses remain small fearing the risks of taking on new employees because of labor laws that make it very difficult to layoff employees. The president of a large Italian construction company, Condotte, says it is easier to separate from his wife than layoff an employee in Italy.
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Mario Monti's Labor Minister Elsa Fornero and changes to Italy's labor laws
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Elsa Fornero says Italy is not a place where people follow the rules, and there is a strong tendency to rig the system to tweak it in different places to benefit different groups. The last 10 goverments have failed to tackle the Workers Law put in place after the Second World War, which is out of place in today's economy. Which is why the changes she has made are so significant for Italy to regain its competitiveness and its potential, and modernize its economy. This is also one of the major positive outcomes of the current eurozone crisis. Spain has launched a similiar effort. It involves a culture change which would increase productivity and investment. It also shows that while the Merkel Christian Democrats may need to adjust the austeity programs to promote growth, some of the structural changes pushed in Europe including the formation of the Monti government are finally on the right track.
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