Italy's temporary layoff scheme runs out of cash, sparks protests

ROME Tue Apr 16, 2013 11:34am EDT

Members of Italy's main trade unions, Italian General Confederation of Labour (CGIL), Italian Confederation of Workers' Trade Unions (CISL) and Italian Labour Union (UIL), hold a banner as they demonstrate to draw attention on the worsening conditions of the Italian workforce, in front of the Lower House of Parliament in Rome April 16, 2013. The banner reads: ''President help us''. REUTERS/Tony Gentile

Members of Italy's main trade unions, Italian General Confederation of Labour (CGIL), Italian Confederation of Workers' Trade Unions (CISL) and Italian Labour Union (UIL), hold a banner as they demonstrate to draw attention on the worsening conditions of the Italian workforce, in front of the Lower House of Parliament in Rome April 16, 2013. The banner reads: ''President help us''.

Credit: Reuters/Tony Gentile

ROME (Reuters) - Thousands of idled Italian workers staged a sit-in in front of parliament on Tuesday and trade unions threatened strikes unless the government steps in to back a temporary jobless scheme which is running out of funds.

Italy's often divided union confederations united to call on Mario Monti's caretaker government to find around 1.5 billion euros to guarantee payments due to some 700,000 workers sent home on reduced pay under the "cassa integrazione" scheme.

The scheme is paid for jointly by the state and companies and allows firms in crisis to stand down workers for a limited period on a reduced salary in the hope of better times.

But it is struggling to meet those commitments due to the huge numbers of workers thrown onto the program by an economy deep in recession. Some 520,000 have already been sent home this year and the fund for 2013 is almost empty.

With Italy striving to reduce its 2 trillion euro public debt, that raises the risk that the workers will soon have no income at all, like most of the country's 3 million of officially unemployed.

"If we go on like this then crime will rise," said Salvatore Gazzolino, a worker from the poor, mafia-infested southern region of Calabria. "If you have no money and no work what can you do? You can only go out and steal."

The protesters carried union flags and banners attacking welfare minister Elsa Fornero, a frequent target of workers' anger following her unpopular reforms last year of the pension system and labor rules.

Fornero said she would meet worker representatives later on Tuesday but gave no guarantees that all the money could be found, a position the unions say is unacceptable.

"The government has no more alibis," said Susanna Camusso, leader of the 6-million strong, left-wing CGIL union. "If we don't get assurances then there will be more protests, we will continue to occupy the squares of this country."

The union leaders told the demonstrators the money could be found by reducing military spending, cutting waste or hiking taxes on financial assets.

RECESSION

With Italy mired in its longest recession for 20 years and thousands of companies going to the wall every month, the cassa integrazione scheme has been inundated this year, according to CGIL data.

At the same time, Italy has promised to keep its budget deficit below the European Union's limit of 3 percent of output and with an official target of 2.9 percent for this year has little room for maneuver. But the unions said there could be no compromise.

"This is not a dispute that can end in a tie," said union chief Luigi Angeletti of the UIL confederation. "If the government does not find the money we will bring hundreds of thousands of workers onto the streets of Rome."

Monti's outgoing cabinet is officially only empowered for "ordinary administration," having remained in office after February's inconclusive election which left no party with enough votes to form a new government.

Yet since the vote Monti has already hiked Italy's fiscal deficit and debt targets and passed a decree to begin settling billions of euros of unpaid bills owed by the state to private companies.

New Chamber of Deputies Speaker Laura Boldrini said if Monti produced an emergency decree to top up the cassa integrazione, then parliament would be able to begin examining it immediately to turn it into law.

(Writing by Gavin Jones; editing by Patrick Graham)

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