Italian telecoms chief calls for urgent labour reforms

Italy’s next government urgently needs to cut labour costs and streamline the state bureaucracy in order to improve economic competitiveness, one of the country’s leading businessmen said on Thursday.

Marco Tronchetti Provera, chairman of Telecom Italia, the telecommunications giant, also urged Italian trade unions to emulate their German counterparts and show more flexibility in bargaining over wages and work conditions.

“As a person, an Italian is more flexible than the average European. But we have the most rigid system in terms of rules and labour,” he said in a Financial Times interview. “We work less than the others and we have fewer people in work.”

He was speaking six weeks before the April 9 general election, which pits the
centre-right government of Silvio Berlusconi, prime minister, against the centre-left opposition of Romano Prodi, the former European Commission president.

The opposition is leading the government by 51.5 to 47 per cent, enough to give it majorities in both houses of parliament, according to an Abacus/Sky TV24 opinion poll on Thursday.

Another poll, by the SWG institute for L'Espresso magazine, estimated the centre-left’s lead at 52 to 47.5 per cent in the race for the Senate, the upper house, but at only 51 to 47.8 per cent in the contest for the lower house.

Since Mr Berlusconi came to power in 2001 Italy has seen meagre growth of about 0.8 per cent per year.

In recent years the country famed for its design-led and artisanal exports has seen its share of world markets shrink as a result of low productivity at home and competition from China, India and eastern Europe.

Politicians from both sides say they understand the need to reduce labour costs but government ministers have poured scorn on Mr Prodi’s promise to slash them by 5 percentage points – at a cost of €10bn ($11.9bn, £6.8bn) – in his first year in office.

Mr Tronchetti Provera, though not publicly taking sides in the election contest, said: “The difference between what [Italian] companies pay employees and what employees get in net pay is about 50 per cent, the highest in Europe.”