FES BRIEFING ITALY Trade Union Monitor May 2022 POLITICAL, ECONOMIC AND SOCIAL FRAMEWORK POLITICAL DEVELOPMENT In 2021 politics in Italy, as elsewhere, was overshadowed by the Covid-19 pandemic and its social and economic conse­quences. In its efforts to combat the pandemic the govern­ment successfully implemented a package of relatively strict measures, aimed primarily at boosting people’s willingness to get vaccinated, whether by requiring particular occupational groups – such as health and education personnel, and police officers – to be vaccinated or by restricting entry to public facil­ities for the unvaccinated. The Italian public broadly welcomed these measures. No substantial»contrarian« movement got off the ground and Italy achieved one of the highest vaccination rates in Europe. This made it possible to reduce lockdown measures to a minimum in the second half of the year. An emergency government under former ECB president Mario Draghi was responsible for this crisis management. It could re­ly on the support of an extremely broad spectrum, ranging from the right-wing populist Lega through Berlusconi’s Forza Italia party and the Five Star Movement to the moderate left­wing Partito Democratico(PD) and also the small radical left­wing party Liste Liberi e Uguali. The only opposition party with any heft is the post-fascist Fratelli d’Italia(FdI) under Gior­gia Meloni. This executive also continued the dialogue that had com­menced under Giuseppe Conte’s cabinet – with the support of the Five Star Movement and PD – which was in power from summer 2019 to January 2021. It did not prove possible to push through demands to prolong the moratorium on dis­missals imposed at the outset of the pandemic. On the central issue of pension reform, however, government and trade un­ions reached a consensus solution in December 2021. By con­trast, within the framework of the 2022 budget, the govern­ment granted tax concessions for those on middle incomes against the protests of the trade unions, which would have preferred a solution favouring those on lower incomes. ECONOMIC AND SOCIAL SITUATION Even before the Covid-19 pandemic struck, Italy was still struggling with the repercussions of, first, the global finan­cial-market and then the Euro crisis, which hit a country al­ready suffering from very low economic growth. In the years 2008–2013 GDP fell by 10 per cent and industrial produc­tion by as much as 25 per cent. In contrast to Ireland, Portu­gal and Spain, Italy has still not returned to pre-crisis levels. It is of grave concern that in the period 2000–2019 Italian GDP grew by only 4 per cent, while Germany’s grew by 26.5 per cent, France’s by 25.2 per cent and Spain’s by as much as 34.7 per cent. During the same period real per cap­ita GDP fell from 27,000 to 26,000 Euros, in contrast to the Eurozone as a whole, which saw a rise from 26,000 to 30,000 Euros. The situation deteriorated even further because of Covid-19. With a GDP fall of around 8.9 per cent and a decline in the total wage bill of 7.5 per cent in 2020 Italy was among the hardest hit countries in Europe. The pandemic has deeply scarred the labour market. Although the trade unions were able to bring about a significant extension of the wage guarantee fund even to micro-enterprises, as a well as a moratorium on dismissals for permanent employees, around a million jobs were lost in 2020, according to ISTAT (Italian Statistical Office) estimates. Hardest hit were precar­ious workers on fixed contracts that were not renewed; around 75 per cent were younger workers, 75 per cent also women. In 2021, there was a trend reversal in the teeth of these se­rious losses. Italian GDP rose by 6.6 per cent, much better than expected, and even the employment losses – mainly among employees on fixed contracts – could largely be compensated. Despite all its structural problems Italy remains a strong in­dustrialised nation. In 2021 its exports grew by 18 per cent and it managed a foreign trade surplus of 50 billion Euros. The country continues to be burdened by its mountain of 1