Italy’s Economic Overhaul Marked by Three Women Wrestling Over Labor Laws

By Alessandra Migliaccio and Chiara Vasarri - Feb 21, 2012 6:01 AM GMT+0700

In a country that for almost a decade was led by a man who publicly referred to his passion for female conquests, Italy is now relying on three women to help overcome the European debt crisis.

Less than four months after the resignation of Silvio Berlusconi, the former prime minister known for his “Bunga Bunga” parties, new Italian Labor Minister Elsa Fornero is mediating between Emma Marcegaglia, head of the employers’ lobby, and Susanna Camusso, leader of the biggest union.

At stake are changes to labor laws to make it easier to hire and fire, a highly-charged issue in Italy, where previous attempts at an overhaul have been marred by protests, violence and even murder. The reforms aim to bring down a decade-high jobless rate of 8.9 percent and are central to Prime Minister Mario Monti efforts to convince investors he can revive Italy’s economy and trim its 1.9 trillion-euro ($2.5 trillion) debt.

“The country needs to persuade markets that it is making changes and these three women are right on the front lines,” Alberto Mingardi, an economist and head of the pro-free market Bruno Leoni research center in Turin, said in an interview. “If Italy is the key to making or breaking Europe, then this reform needs to be watched carefully.”

Firing Rules

The fact that three women are driving the debate is unusual in a country that ranks 74th of 135 in the World Economic Forum’s 2011 Gender Gap Index, trailing Malawi and Kazakhstan.

Talks between them resumed yesterday, with negotiations focused on the revamp of unemployment benefits and training programs. They will continue on Feb. 23, Marcegaglia said yesterday. The thornier issue of easing firing rules will be left for the final stage in early March.

An academic, a union stalwart and the daughter of a steel magnate, the three come from diverse backgrounds, and it may not be easy to forge a labor agreement. Monti said yesterday that his government would pass the legislation by the end of March even without the backing of unions.

The fact that we are women “doesn’t necessarily change anything” in our relationship, Camusso said in a Feb. 10 e- mailed response to questions. “Our experiences are all very concretely rooted into our respective roles as we represent precise and usually conflicting interests.”

Professor

Fornero, 63, is an economics professor at the University of Turin and a former vice president of the supervisory board at Intesa Sanpaolo SpA’s, Italy’s second-biggest bank. When she accepted the additional portfolio of equal opportunity minister, Fornero succeeded Mara Carfagna.

A lawyer, Carfagna, was better known for posing topless and being a Miss Italy contestant. Berlusconi publicly said that he would marry her immediately if he wasn’t already committed, prompting a public scolding from his now ex-wife Veronica Lario.

Fornero declined to be interviewed for this story, according to her office. At a conference last week, Fornero said it was “no accident” that the heads of the biggest union, the business lobby and labor policy were all women.

Camusso, 56, is the first woman to lead the 6 million- member CGIL union. The chain-smoking leader started her career in 1977 as representative for metalworkers.

Her rival, Marcegaglia, 46, is a staunch supporter of reforms aimed at boosting competition as head of Italy’s most influential business lobby and her family’s steel company.

End of Berlusconi

Berlusconi once introduced Marcegaglia as a “good-looking chick” at a conference in Rome in February 2011. She told reporters that she didn’t mind being called attractive as long as the government pushed ahead with economic reforms. When change didn’t come, she voiced her opposition eventually calling for Berlusconi’s resignation.

Monti, 68, whose government of non politicians took over from Berlusconi, 75, in November, has repeatedly said that easing firing rules can no longer be “taboo” and pledged to push through changes.

The sticking point is whether to modify Article 18 of the labor code, the part that bans firing without just cause and forces employers to rehire and compensate workers deemed to be unjustly released. Employers, led by Marcegaglia, say it makes them reluctant to hire because it becomes almost impossible to cut staff during tough economic times, while Camusso refers to the measure as “a norm of civilization.”

Advisers Assassinated

Berlusconi also tried to overhaul the law in 2002, backing down after millions protested across the country.

The demonstration came four days after Marco Biagi, an adviser to the government on labor law, was gunned down outside his home in Bologna. The killing was claimed by the New Red Brigades, which took their name from the terrorist group in the 1970s. The murder of Biagi followed the 1999 slaying of another labor law consultant, Massimo D’Antona, by the same group.

Their killers were apprehended in 2003 and police say they have wiped out the remnants of the Red Brigades. Still, concerns about violence remain after envelopes containing bullets addressed to Fornero, union leaders and Marcegaglia were intercepted by the postal service last month.

Article 18 was implemented 40 years ago, and critics say it has led to a two-tier job market where older workers can’t be fired and employers increasingly resort to temporary contractors when taking on new workers. More young people are excluded from the market, with joblessness among them topping 30 percent, almost four times the main rate.

Romano Prodi, the former Italian prime minister and European Commission president, said that having the three women leading the talks might yield an agreement.

Because women “generally have more common sense,” he said in an interview.

To contact the reporters on this story: Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net Chiara Vasarri in Rome at cvasarri@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Jerrold Colten at jcolten@bloomberg.net;