Italian govt saddened at CGIL snubbing productivity deal

Agreement features tax breaks for improved productivity

Italian govt saddened at CGIL snubbing productivity deal

Rome, November 22 - The Italian government said Thursday it was disappointed that the nation's biggest trade union confederation, the left-wing CGIL, decided not to sign a deal on measures to tackle the problem of low productivity. The agreement, which was signed by more moderate unions late on Wednesday, features 2.1 billion euros worth of tax breaks that the government has promised to allocate over the next two years for workers that hit productivity targets. While maintaining the system of nationally bargained collective contracts for many sectors, the agreement also gives companies greater scope to introduce flexibility in wage agreements, including changes to working hours. It also makes it possible for companies in financial difficulty to demote workers and pay them lower salaries, if there is the consent of the unions. The CGIL refused to sign up, saying the agreement would reduce workers' real incomes. It was also frustrated that the government did not agree to its proposal to remove tax from the so-called 13th salary Italian workers are paid in December to help with the extra expense of the holiday period. "We are very sorry that the CGIL failed to sign, the reasons they gave do not hold water," Industry Minister Corrado Passera said Thursday. Some experts have expressed doubts about how effective the deal can be without having the nation's biggest union on board. But Italian Premier Mario Monti hailed the agreement. "This is an important step forward for economic recovery," Monti told a press conference. Economists have said low productivity has contributed to Italian firms losing competitiveness and to the sluggish performance of the Italian economy over the last decade. Istat figures released on Wednesday suggested that the Italian economy has been underperforming in the field of productivity for two decades. The national statistics agency said productivity increased in Italy by just 0.5% each year on average in the period from 1992 to 2011. photo: Industry Minister Corrado Passera.

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