ROME Bank of Italy Governor Ignazio Visco on Wednesday urged Italians not to resist a labour market reform Italian Prime Minister Mario Monti has said he will present by the end of the month with or without the support of the country's powerful unions.
Visco said a better functioning labour market that embraces changes in technology, markets and businesses had to go hand in hand with other structural reforms such as deregulation.
He said Italians should put aside any "desire to resist" change that would underpin long-term growth and help reduce Italy's debt, which amounts to about 120 percent of gross domestic product.
Welfare Minister Elsa Fornero on Wednesday called a meeting with labour unions and employers for Monday to resume talks on the controversial reform.
Italy's biggest union, the CGIL, has pledged to fight to maintain article 18 of the labour statute, which was adopted in 1970. It obliges firms with more than 15 employees to re-instate workers ruled to be wrongfully dismissed, with full payment of lost salary.
Fornero has said that changing Article 18 shouldn't be a "taboo," and on Sunday she pledged a "radical" reform.
Monti's technocrat government took power in November, when spiralling market concerns about the sustainability of the country's 1.9 trillion euro public debt led to the resignation of former Prime Minister Silvio Berlusconi.
After passing a 33-billion-euro austerity plan in December, and presenting a deregulation law in January, Monti is now pushing to overhaul the labour market, which is vital for future growth in the euro zone's third largest economy.
The government's aim is to remedy the country's "dual" labour market, which offers heavy protection to salaried workers and no security or benefits to millions of mostly young people on temporary contracts.
Italy's employment rate is just 57 percent, the second lowest in the euro zone, and youth unemployment is more than 31 percent, official data shows.
The female employment rate in Italy, at 46 percent, is the lowest in the European Union after Malta, lagging 68 percent for Italian men and a 58 percent average for women in Europe.
Speaking at the start of a conference on women in Italy, Visco said the government's efforts to shore up public finances had to be accompanied by measures to boost the Italian economy, which has been one of the most sluggish in the euro zone for more than a decade.
"Italy is first of all an elderly country. That makes the challenge of economic growth not only difficult, but also decisive," Visco said.
"Maintaining the quality of life we have reached in our country calls for an increase in the intensity of human capital and renewed productivity growth...for which we have to ask that we work more, in larger numbers, and for longer," he said.