The problem of unemployment is the main challenge facing the current Italian government. Amid the economic stagnation currently gripping the country, the unemployment figures are raising serious concerns. In the first quarter of 2014, the unemployment rate reached 13,6%, with young people between the ages of 15 and 24 being the hardest hit. In this age group, unemployment stands at 46%.
Last month, Prime Minister Matteo Renzi 's government presented a labor reform bill aimed at mitigating these unemployment rates by introducing greater flexibility regarding temporary work. This law seeks to improve upon legislation passed just two years ago under Mario Monti's government.
In April 2013, Monti was replaced by Enrico Letta, and in early 2014 Renzi arrived. All of them have defined unemployment as the most serious problem facing Italy. However, the measures taken so far by their respective governments to stimulate employment have not yielded the desired results.
Local experts have already highlighted on several occasions that the reasons why a large part of the Italian population is out of work are not so simple as to be found in labor laws. Its roots run much deeper than Italian politicians think.
Italy's unemployment rate is primarily due to a weak economy that is not demanding workers. Indeed, recent slight signs of economic improvement, including an increase in the consumer confidence index last May, have not yet translated into a decrease in unemployment.
GDP in Italy fell by 0,1% in the third quarter of last year, after which it grew by 0,1% in the following quarter and has fallen again by 0,1% at the beginning of 2014. This stagnation causes , among other things, that no one can really find the magic solution to eradicate unemployment. Economic growth is very weak, so now what is necessary is to give a new impulse in the short term.
Matteo Renzi's government has drawn up an ambitious reform plan to revive the economy. Now there is a huge risk that this new impetus will fail to stem the tide of rising unemployment. If the trend continues at this rate, the unemployment rate is estimated to reach around 37% by 2020. A complete disaster.