Italy's Senate approves youth-unemployment decree

Legislation, including postponement of VAT rise, passes to House

Italy's Senate approves youth-unemployment decree

(see related story on debt repayments) Rome, July 31 - The Senate on Wednesday approved a government decree containing measures aimed at combatting rampant youth unemployment in Italy. Premier Enrico Letta's executive hopes the package of tax breaks to encourage firms to take on young people will create 200,000 new jobs. The measures are aimed at the Under-30s worse equipped to face up to the effects of the recession, such as those without a high-school diploma, those living alone and those who have another person depending on them. The package introduces tax cuts of up to 650 euros a month per worker for a maximum period of 18 months for new hires and 12 months for employees whose temporary or freelance contracts become permanent. Italy's jobless rate is over 12% and around four in 10 young people aged 15-24 are out of work. The decree also includes the postponement of a scheduled 1% rise in the top band of value added tax (VAT) until October. The government is trying to find the money to be able to avoid the increase that would take top band of VAT from 21% to 22%. The Senate approved the decree with 203 votes in favour 35 against and 32 abstentions. The legislation now moves to the Lower House.

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