By Silvia Marchetti
ROME (MaceNews) – Italy’s pandemic layoff freeze will be lifted at the end of June but the recovery underway and special government incentives will likely push firms to keep their employees and potentially hire more, said ruling coalition sources.
“The layoff freeze has been a key measure which was adopted right after the COVID-19 outbreak but it obviously can’t go on forever,’ said an official. “We will however keep supporting ailing workers if needed, but a great boost is expected to come from the economy.”
We see the first shy signs of a revival which are bound to strengthen in the second quarter. The picture ahead appears to be much rosier than previously forecast”, the official addedl.
As a form of compensation for lifting the freeze, Rome’s government will subsidize layoff expenses for businesses that avoid firing their employees. Such a measure is in line with similar pandemic rules adopted across Europe to support the industrial sector and is as a good compromise, officials said.
Currently, Italian layoff funds for employees with a contract are co-funded by the state and the employers, who are required to pay a sort of tax which goes into public coffers to tackle emergencies. Rome intends to abolish the fee at least until December, giving oxygen to those firms who will keep their workers.
Trade unions have voiced concern that between 600.000 and two million jobs could be at risk starting in July, but officials are confident the recovery underway, topped with EU aid, will boost businesses confidence and incentivize hirings.
Sources expect the economy to grow this year beyond previous forecasts, potentially above 4% thanks to two key factors: vaccines and pro-growth European funds. The vaccination campaign has reached over 50% of Italy’s population while the first part of EU pandemic aid amounting to roughly €22 billion out of a total €190 is expected to land during summer.
“We have forwarded a detailed recovery plan to Brussels and set-up a centralized government unit to speed up the use and investment of these funds. It is very likely we’ll start getting aid as soon as July”, said another official.
Italy’s layoff freeze has been exceptional, shielding thousands of workers during the pandemic. It was launched last February and prolonged a few months ago, with business lobbies noting that no other European country has adopted a program with such a broad scope.
Sources however stressed that despite the time is ripe to lift the freeze, government would continue to monitor the labour sector and step-in with new funds and extra measures to help struggling firms and workers if needed.
“Firms who agreed to the freeze are of course free again to lay off their workers, but hopefully with the economy slowly returning to normal and the need to recover lost months of lockdown in terms of productivity, firms will be needing to keep their labour force,” an official said.
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Contact this reporter: silvia@macenews.com.
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