Rome - Italy's new Prime Minister Matteo Renzi pledged on Wednesday to introduce a series of “very important reforms” next week to help create jobs, make housing more affordable and remodel crumbling school buildings.
The 39-year-old seized the leadership from Enrico Letta in a party coup last month, promising to accelerate the sluggish pace of reforms in the euro zone's third-biggest economy, which is one of the worst-performing in the currency bloc.
“On Wednesday we will present an affordable housing plan ... and we hope for measures on the Jobs Act,” Renzi said during a meeting with Italian mayors in Syracuse, Sicily, which was broadcast live on television.
The government was ready to invest 2 billion euros to improve the country's decaying school buildings, he said, and would spend 1.7 billion euros to help fight soaring youth unemployment, now at more than 40 percent.
The European Commission put Italy on its watch list on Wednesday due to the country's very high public debt and weak competitiveness, meaning it will monitor Italy's reforms and could impose fines if they are not implemented.
In a response, the economy ministry in Rome said the reforms promised by the government were in line with the Commission's statement. It noted that for the past two years, Italian governments had concentrated on stabilising public finances and had been rewarded with a sharp lowering in borrowing costs.
“The moment has now come to place economic growth and jobs at the centre of government action,” it said.
The Italian economy grew by a marginal 0.1 percent in the fourth quarter of last year, the first quarter-on-quarter rise in output since the middle of 2011, and growth is expected to remain weak this year. Overall unemployment was running at 12.9 percent in January, its highest since records began in 1977.
While Renzi did not say what parts of his so-called “Jobs Act” would be introduced next week, he has said the government would make it cheaper for companies to take on staff by reducing the so-called “tax wedge”, the difference between the cost of employing a worker and the worker's take-home pay.
“The competitiveness of the Italian economy is currently limited by the high tax wedge on labour costs, a problem the government is preparing to take on with determination,” the economy ministry said in its statement
During a speech to parliament before he won a final confidence vote last week, Renzi pledged a double-digit cut during the first half of the year in the tax wedge.
The government's housing package, which has been drafted by Infrastructure Minister Maurizio Lupi, is aimed at reducing taxes on rental housing and providing young couples with affordable home loans.
Renzi, who was mayor of Florence before becoming prime minister and is not a member of parliament, has promised an ambitious agenda for his first 100 days in office, making an overhaul of the electoral system his first goal, though he has so far struggled to make headway.
He wants to introduce a system that provides a clear winner to replace the one that led to last year's deadlocked election result, but he faces opposition by small parties within his own coalition who fear they will not make it into parliament under the new rules.
Reuters