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‘A million more unemployed’: Fears as Italy’s Covid freeze on layoffs set to end

Italy is the only European country to ban companies from laying off staff amid the pandemic. But mass job losses are expected across the country as the freeze comes to an end in June.

'A million more unemployed': Fears as Italy's Covid freeze on layoffs set to end
Photo: Filippo Monteforte/AFP

Trade unions in Italy are warning of a “social tsunami”, as they say the freeze saved thousands of jobs after the pandemic plunged Italy into deep recession – but the European Union has been disparaging, and employers are angling for its end.

Companies were first banned from sacking workers under former premier Giuseppe Conte in February 2020, when Covid-19 sparked Europe’s first nationwide lockdown in Italy. The measure, which is unique in Europe, was later extended.

READ ALSO: Italy to spend 40 billion more to help virus-hit economy

When Mario Draghi became prime minister in February this year, he said the government “should protect workers… but it would be a mistake to protect all economic activities equally”, saying there must be a “choice”.

The freeze is due to expire at the end of June for the biggest companies, notably in industry and construction, although small and medium-sized firms, particularly in services, have until the end of October.

The European Commission this month denounced the Italian ban on layoffs as “counterproductive” as it protects employees on long-term contracts but not those in more precarious jobs – notably women and young people who have so far felt the brunt of the economic problems in Italy.

READ ALSO: ‘Left behind’: Why are so many women unemployed in Italy – and what’s being done about it?

Photo: Anna Monaco/AFP

It asserted that in France and Germany, which instead offered financial support for people whose hours were cut by struggling companies, the effects of the pandemic on employment have been less severe than in Italy.

The members of Draghi’s coalition government, who rallied around the former European Central Bank chief after Conte’s government collapsed, are divided on the subject.

The biggest party in parliament, the Five Star Movement, has echoed trade unions in calling for a further extension of the layoff ban for everyone, and Labour Minister Andrea Orlando, from the centre-left Democratic Party (PD), last month raised the prospect of an extension under certain conditions until August, before back-tracking under pressure from employers.

‘A million more unemployed’

The minister for economic development, Giancarlo Giorgetti, a member of the League, has instead proposed extending the freeze for the hardest-hit sectors, such as textiles.

The fear is that Italy could face a wave of redundancies when the ban ends.

“The most realistic estimates point to 70,000 to 100,000 layoffs, which is certainly not negligible, but is not enormous,” Francesco Seghezzi, head of the Adapt Foundation, which specialises in research on employment, told AFP.

Trade unions fear the numbers could be much higher, warning of “a million more unemployed”, while the Bank of Italy estimates 440,000 jobs were saved in 2020 thanks to the rule.

Despite the ban, there were 550,000 layoffs in Italy in 2020, as those related to disciplinary issues or the closure of companies were exempt.

There are also hundreds of thousands of workers in more precarious jobs whose contracts were not renewed.

In total, almost a million jobs were lost last year in Italy.

READ ALSO:

The unemployment rate reached 10.4 percent in the first quarter of 2021, the highest since the beginning of 2019. Among the 15-24 age group, it rose to 39.2 percent for women and 32.7 percent for men.

But the economy is now picking up steam once again and some sectors such as manufacturing and construction are instead struggling to find staff owing to a lack of skilled recruits.

Almost 1.3 million jobs, most of them temporary, need to be filled between June and August, according to the Union of Chamber of Commerce (Unioncamere).

“The signs of economic recovery are so encouraging that the lifting of the ban on layoffs could have a less dramatic impact than initially feared,” David Benassi, professor of sociology at the University of Milano-Bicocca, told AFP.

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POLITICS

Italy’s Meloni in Libya to discuss energy and migration

Italian Prime Minister Giorgia Meloni arrived on Saturday in the Libyan capital Tripoli for talks on energy as well as the thorny issue of migration, Libyan state media said.

Italy's Meloni in Libya to discuss energy and migration

Meloni’s trip – her second to a North African country this week – is the first by a European leader to war-battered Libya since her predecessor Mario Draghi’s visit in April 2021.

State television said the Italian premier was received by Abdelhamid Dbeibah, who heads the Tripoli-based, UN brokered Government of National Unity which is contested by a rival administration in the east.

Libya and its former colonial power Italy are key trade partners, particularly in energy, where Italian giant Eni plays a major role in tapping into Africa’s largest known oil reserves.

Meloni was accompanied by Eni chief Claudio Descalzi, who is expected to sign a deal with Libya’s National Oil Company to develop two Libyan offshore gas fields.

Eni will invest $8 million in the two fields, NOC chief Farhat Bengdara said in televised remarks this week, adding they are expected to produce 850 million cubic metres of gas.

Meloni visited Algeria on Monday seeking supply deals from Africa’s top gas exporter to help reduce reliance on Russia after it invaded Ukraine last year.

During her trip to Libya, she is also expected to discuss the issue of migration amid rising numbers of irregular migrants from Libya to Italy.

Libya has been wracked by years of conflict and division since a NATO-backed revolt toppled dictator Moamer Kadhafi in 2011.

The country is a conduit for thousands of people each year fleeing conflict and poverty across Africa, seeking refuge across the Mediterranean in Europe.

Meloni’s far-right government took office in October, vowing to stop migrant landings in Italy, which reached more than 105,000 in 2022.

The central Mediterranean route is considered the world’s most treacherous, according to the International Organization for Migration, which estimated that 1,377 migrants had disappeared on that route last year.

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