(File image) Italian Prime Minister Mario Monti

Rome - Prime Minister Mario Monti on Wednesday asked Italy's political parties to swiftly approve his contested labour reform so that it is law by the time he attends a crucial European Union summit in Brussels on June 28.

The legislation, which proposes easing firing restrictions, discouraging the use of temporary contracts and handing out unemployment benefits to more people, is still being reviewed by parliament three months after it was presented by the cabinet.

It has been criticised by trade unions who fear a rise in lay-offs, by employers concerned by higher labour costs, and by many economists who say it would make only marginal changes to a rigid labour market that needs a major shake-up.

“The government has asked parliament to accelerate its examination of the labour market reform... so that the European Council on June 28 can take note of the passage of this important structural reform,” Monti said in a statement.

In what appeared to be a clear offer of a trade off, in the same statement Monti promised “rapid legislation” to address other problems raised by the parties related to pensions, welfare benefits and hiring costs for companies.

Monti replaced discredited former prime minister Silvio Berlusconi in November as the recession-hit country teetered on the edge of a Greek-style default, passing a tough austerity package to try to restore investor confidence.

The measures, including 24-billion euros in new taxes for this year alone, pushed down Rome's borrowing costs for a time. But concerns over the future of the euro zone have seen yields return to worrying levels in recent months.

Monti has seen his popularity fall steadily this year, reflecting resentment at tax hikes, rising unemployment and a year-long recession which shows no sign of ending.

The prime minister's approval rating has slumped to 33 percent from 71 percent when he took office, polling agency SWG said on Friday. - Reuters