Italy jobless records put heat on Monti in poll race

ROME Tue Jan 8, 2013 2:22pm GMT

Italy's Prime Minister Mario Monti arrives at a news conference after a European Union leaders summit in Brussels December 14, 2012. REUTERS/Yves Herman

Italy's Prime Minister Mario Monti arrives at a news conference after a European Union leaders summit in Brussels December 14, 2012.

Credit: Reuters/Yves Herman

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ROME (Reuters) - Youth unemployment in Italy rose to an all time high above 37 percent in November, data showed on Tuesday, piling pressure on outgoing Prime Minister Mario Monti who is seeking a second term at national elections in February.

Italy has been in a deep recession since the middle of 2011 and joblessness has risen steadily as businesses clamp down on staffing levels to cope with crumbling domestic demand.

The plight of the unemployed, particularly among the young, will be a crunch issue at the election and Monti, who heads a centrist group, is criticised by opponents on the left and right for hurting the economy in his efforts to fix public finances.

Headline unemployment was stable in November at October's record high of 11.1 percent, statistics institute ISTAT reported. Joblessness rose above 11 percent in October for the first time since 1999.

November's rate was marginally below a forecast of a further rise to 11.2 percent in a Reuters survey of analysts, but it was up 1.8 percentage points from November 2011 when Monti was appointed to save Italy from a mounting debt crisis.

The youth unemployment rate, referring to 15-24 year-olds, jumped for the third month running to 37.1 percent, its highest level since records began in 1992.

Companies are reluctant to give new recruits regular contracts because strong job protection means it is hard to fire them. So young people tend to move from one temporary contract to the next, and opportunities have dried up in the recession.

Monti sought to address the problem with a hotly contested labour reform passed last summer, but critics say that by making it more costly and complicated for firms to offer temporary contracts, the reform discouraged hiring in the recession.

"You always hope that if you put some effort in you will get something back," said 22-year-old Michele Andaloro as he lined up in search of work at one of Rome's largest job centres.

"The next government needs to work for the future of young people and not behave like in the past."

MONTI LAGGING

Most recent polls give Monti's centrist alliance around 15 percent of the vote, lagging the centre-right led by former Prime Minister Silvio Berlusconi at about 28 percent, and well behind Pier Luigi Bersani's centre-left at around 39 percent.

Opponents lost no time in attacking Monti over the latest figures.

"Youth unemployment at 37.1 percent is a terrible figure which highlights the failure of the Monti government," said Maurizio Gasparri of Berlusconi's People of Freedom party.

The left-wing CGIL union, which fought Monti's labour reform, said the data marked the failure of his austerity policies "which worsened the recession and inequality and have mainly hurt the young generations."

Analysts say the growing financial difficulties of families are also forcing more young people to look for work rather than study or live off family income.

In a dismal series of records, the employment rate edged down in November to a 12-month low of 56.8 percent, while the male employment rate fell to 66.3 percent, the lowest since records began in 1992.

"The worst hit by the crisis are those in the industrial section and construction," an ISTAT spokeswoman said.

Italian industrial output is still more than 25 percent lower than its level of mid-2008, before the recession brought on by the global financial crisis.

Analysts say the real challenge for Italy is to increase its chronically low rates of employment and participation in the labour market, which are among the lowest in the industrialized world, especially among women, the young and the elderly.

(Additional reporting by Cristiano Corvino; Editing by Catherine Evans)

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