(see related) Rome, July 4 - The International Monetary Fund (IMF) said Italy's unemployment levels for workers under the age of 25, which currently hold at almost 40% compared with a European Union average of 23.5%, are "unacceptable", according to delegates at the Italian economy ministry on Thursday. The IMF urged Italy to move towards a single, more flexible contract for the entry of new workers, calling for it to gradually increase job security proportionately to age, according to a new report. This contractual method could have the effect of reducing the cost of new hires and offering support to a traineeship program, the report said. The IMF also slashed its forecasts for the eurozone's third-largest economy to a 1.8% contraction in gross domestic product this year from a previous 1.3% drop. At the same time, it raised its estimates for next year to a 0.7% increase in GDP from a previously expected 0.5% gain.