Tuesday October 13, 06:04 PM
Italy must do more to help jobless -c.bank's Draghi
By Gavin Jones and Francesca Landini
ROME, Oct 13 (Reuters) - Italy's central bank Governor Mario Draghi attacked the country's welfare system on Tuesday as patchy and inadequate, saying most unemployed Italians get far less financial
help than in other large European countries.
His words clash sharply with Prime Minister Silvio Berlusconi's often repeated assertion that thanks to government measures 'nobody has been left behind' in the current crisis.
In a speech delivered near Turin, Draghi cited a raft of data to illustrate the inadequacy of Italy's social safety net and said the crisis is 'showing up the shortcomings of our system and the need to adopt reforms urgently.'
With unemployment benefits varying sharply according to the size of companies, the sector in which they operate and type of labour contract, 'many (unemployed) workers are still excluded from public support,' he said.
The percentage of Italians who get jobless aid or benefit from reduced hours schemes to keep them in work is 40 percent of all unemployed workers, compared with 73 percent in Spain, and 97 percent in France.
While Italians in large industrial firms benefit from the 'cassa integrazione' scheme which allows them to be sent home temporarily on reduced pay, no such mechanisms are in place for the service sector or small businesses, Draghi pointed out.
At the same time the protection offered by the cassa integrazione risks being 'excessive' in the current crisis, as it can keep people in work artificially 'in situations of structural crisis (for firms) that are unlikely to be reversed.'
Around 1.6 million Italian workers are not eligible for any benefits if they lose their jobs, while another million would receive only partial, token assistance, Draghi said.
To receive basic unemployment benefit in Italy a worker has to have paid contributions for at least 12 months in the two years prior to losing his job.
This compares to requirements of 6 months of contributions out of the previous 22 months in France and 12 months in the previous six years in Spain, Draghi said.
At the same time 'most European countries, but not Italy' offer some kind of alternative benefits to those workers who have not paid sufficient contributions.
Italy spends around 0.5 percent of gross domestic product on help for the unemployed, compared with a euro zone average of 1.7 percent.
Draghi repeated his often expressed view that Italy's ageing population means it needs to raise the average retirement age if future pensioners are to receive adequate pensions.
A & (Paris: FR0000075160 - news) apos;significant increase' in the retirement age would also increase Italy's low employment rate and help its growth potential, he argued.
(Editing by Patrick Graham) Keywords: ITALY WELFARE/DRAGHI
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
