* Biggest union calls eight-hour stoppage
* Monti says other unions back reform
* Monti, takes off gloves, says no more talking
By Francesca Piscioneri
ROME, March 21 Italy's largest trade union
called a general strike over labour reforms on Wednesday,
escalating a confrontation with Prime Minister Mario Monti and
testing his resolve to transform the euro zone's third biggest
After weeks of negotiation, Monti announced late on Tuesday
that the time for talking was over and he would press on with
plans to overhaul employment protection laws dating back to the
1970s, despite stiff opposition from the left-wing CGIL union.
Reforming Italy's economy is at the heart of efforts to
restore confidence in the euro zone and Monti's drive to shake
up labour laws is being closely watched on financial markets.
The CGIL proposed an eight-hour general strike and another
eight hours of smaller stoppages to protest against the
measures, which would allow companies to lay off individual
employees for disciplinary or business reasons.
"This will not be a flare-up which burns out in a day as the
government expects and we have a duty to get results before we
see years of mass dismissals from companies," the union's
secretariat said in a statement.
A day-long strike would be the biggest demonstration yet
against unelected technocrat premier Monti, a former European
Commissioner who has imposed painful cuts and tax hikes and an
overhaul of the pension system since taking office in November.
CGIL head Susanna Camusso, a tough, gravel-voiced chain
smoker and the union's first woman leader, said Monti's entire
programme had put the burden of sacrifice on ordinary people.
"We are dealing with a government which, in the end, unloads
all the real costs of what they are doing on workers, pensioners
and people soon to be on pensions," she told a news conference.
"Reforming the labour market will not, in itself, create a
single job," she said, adding that waves of austerity would hurt
Italy's enfeebled economy.
Employers welcomed the proposed changes to laws which they
say discourage companies from hiring staff, hinder investment
and condemn large numbers of young people to insecure, low-paid
work with few rights.
"It's quite a profound change because it affects pretty much
all issues relating to the labour market," Marco Venturi, head
of the small business association Rete Imprese told Canale 5
television. "It was a long, drawn out discussion which ended
with a conclusion which I think is quite satisfactory."
Monti, who clashed with U.S. corporate giants Microsoft and
General Electric during his years in Brussels, has unveiled his
tougher, uncompromising side by brushing aside opposition to a
reform that was demanded last year by Italy's European partners.
He said that while he was worried by the CGIL position he
would not negotiate further now that he had the broad support of
the more moderate CISL and UIL unions as well as employers.
The reform plan unveiled on Tuesday went further than
expected by weakening protections against dismissal not only in
new contracts, as expected, but also for millions of people
already in employment.
The key reform to Article 18 of the labour code, a talisman
for the unions of concessions they secured from bosses 40 years
ago in the heyday of their power, will be presented to
parliament after fine-tuning during the rest of this week.
The parliamentary process presents another challenge for
Monti. The centre-left Democrat Party, one of the main groupings
he needs for support, has strong ties with the CGIL and risks a
split between its more centrist and leftist wings, potentially
threatening the stability of the government.
While the reforms do not go as far as some labour experts
had urged, if Monti is successful they will bolster confidence
in his ability to push through the major changes that are needed
to restore growth and reduce high public debt and unemployment.
Appointed as Italy faced the risk of a Greek-style debt
crisis, Monti has helped calm panicked markets. Benchmark bond
yields, the key indicator of government borrowing costs, have
declined sharply from the danger levels of more than 7 percent
they reached at the height of the crisis.
However the problem of a debt mountain equivalent to 120
percent of gross domestic product, second only to Greece in the
euro zone, and chronically weak economic growth remain.
Tito Boeri, a professor at Bocconi university where Monti
was rector, said the reforms would do little to reduce the
number of people in insecure, short-term employment, although
they would make such contracts more costly for employers.
But he added that Monti's willingness to take on the unions
and forge ahead despite failed negotiations marked a major
change from past practice.
"The method is an important innovation in Italy and that is
certainly to be welcomed because there was this practice in
which the so-called social partners could exert power and this
is clearly unsustainable," he said. "But in terms of the content
of the reform I have serious doubts."
He noted that the changes will hand considerable power to
the courts, which will have to rule on disputed cases and decide
whether workers who successfully challenge their dismissal are
reinstated or offered a payoff.
The changes would extend the current system of unemployment
cover which excludes workers on temporary contracts but would
still leave many with no protection if they lost their jobs.
More than 30 percent of 18- to 24-year olds in Italy are
unemployed, and only about 57 percent of Italians have a job,
giving the country one of the lowest employment rates in the