ITALY - Italy’s trade unions have voiced a unanimous ‘no’ to prime minister Silvio Berlusconi’s plans for major pension reform in 2003, despite his assertion that the social security system is set to “explode”.

Speaking at a conference in Rome last week, Berlusconi said that 2003 would be the year of big reforms, adding that the government must tackle the problem of pensions or risk bankruptcy.

“A reform is being asked of us by Europe, and we must confront it. There is a gap of 100,000 billion euros between contributions and payments and it cannot be ignored. The social security system is destined to explode,” said Berlusconi.

But the unions deny that a complete reform is needed – the opinion voiced by Savino Pezzotta, leader of Cisl, the Italian Confederation of Workers’ Trade Unions.

Luigi Angeletti, head of Uil, the Italian Labour Union has agreed, believing that rather than a reform it would be better to “update the contents of the current proxy,” and “offer incentives to those who will continue to work beyond the age of retirement”.

Guiseppe Casadio of the trade union for the fashion and textile industry, Cgil, called reform “impractical”.

It is feared that a complete reform will not resolve the pensions crisis, but could risk creating further problems.

Pensions reform has been discussed by the Italian government for some months, with ideas such as offering employees cash incentives to stay in work longer or penalising those who retired early. The issue of raising the retirement age has also been bandied around, but the unions have made their disapproval clear. Berlusconi faces an uphill task as the European Council is likely to pressure all member states to increase the age of retirement by five years before 2010.

As of January 1 2003, the Italian government raised the state pension, as promised in election campaigns, to 516 euros a month for those over the age of 70 – a rise of 2.4%.