Italy to approve labour reform ahead of EU summit

Italy's parliament was set Wednesday to approve a controversial labour market reform so Prime Minister Mario Monti can go to a key Brussels summit with it in hand to reassure his EU partners. The reform, which Monti's government says is key to restarting growth in the recession-hit economy, will get final approval the day before the summit, as Italy races to prove it is doing what it takes to stave off the debt-crisis. Rome had called on parliament to make sure the reform is given the stamp of approval in time, but Monti -- whose technocratic government depends on the support of bickering coalition parties -- has had to compromise on the details. Addressing parliament on Tuesday, he said it was "important that Italy arrives at the summit with the force of a parliament-government tandem." The project, which was unveiled in March after months of bitter disputes with trade unions, is based on the Danish "flexicurity" model, which aims to ensure both flexibility and security in the labour market. It includes incentives for employers to hire workers but also eases the procedure for letting them go in case of a downturn, and will help young people get jobs though apprenticeships, in a country hit by high youth unemployment. Workers will also all be eligible for a modernised welfare scheme from 2017. Greater labour flexibility is one of the so-called structural reforms that the European Commission, International Monetary Fund and Organisation for Economic Cooperation and Development have long been advising Italy to adopt to invigorate its economy. But Monti's original package was watered down as parties, trade unions and employer groups fought to bitterly defend their own corners, leaving many economists fearing the reform is tootimid to shake up the labour market. The centre-right insisted businesses be left wiggle room to give people rolling shorter-term contracts, while the left demanded greater measures be included to protect precarious workers. The country's biggest union, the left-wing CGIL, still insists that the reform risks increasing unemployment, while Italy's Confindustria business association says it does not go far enough in strengthening employers' rights. The CGIL has called for a mass protest against the reform in front of parliament on Wednesday afternoon, as the project goes to the vote. Bu as Italy comes into the debt-crisis crosshairs once more, with rising borrowing costs and a massive debt pile, political and social parties across the spectrum are being forced to fall into line.