ITALY – Italy’s unions are threatening to strike over pension reform plans, but prime minister Berlusconi says there is no way of avoiding reform.

The government hopes to approve the pensions proposals next Monday when the budget is also announced. But unions are up in arms at the reforms which will see contribution periods increased, and delays to retirement rewarded.

The leaders of the Cgil, Cisl and Uil unions have all said that strike action will be considered if the reforms are agreed.

However, prime minister Silvio Berlusconi says that there is no choice. “We cannot leave pensions as they are because Europe is asking the reforms of us,” he is reported as saying at a conference in New York.

The level of public spending on pensions in Italy is among the highest in Europe, with the current pension system accounting for 15% of Italian GDP each year.

At the other end of the scale, employers’ organisation Confindustria is complaining to the government that the proposals are too soft, and that more needs to be done.

If the proposals are approved, they will then be discussed and amended with the final text approved at the end of 2003.

Moody’s Investor Services said in its annual review of Italy’s credit picture, that the pensions debate in Italy “could spark social discontent, especially as it comes during an economic recession”. Social discontent was witnessed in France and Austria earlier this year when similar pension reform proposals led to nationwide demonstrations.

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