ITALY-POLITICS: Proposed Pension Cuts Provoke Social Tensions

By IPS Correspondents Reprint | | Print |

Paddy Agnew

ROME, Nov 10 1994 (IPS) - Italy’s three major confederated unions will Saturday stage a major protest in Rome with one million workers expected to take to the streets of the Italian capital to protest against the terms of the 1995 Finance Bill or Budget.

Even last weekend’s disastrous floods in northern Italy, in which 63 people have already been confirmed dead and 30 are still missing, has not stopped a determined trade union movement from taking to the streets.

This week, leaders of the three confederated unions, CIGL, UIL and CISL, met to consider suggestions that the estimated 25 million dollars worth of funds gathered from activists to organise Saturday’s massive protest be instead donated to victims of the flood disaster.

The union leaders decided otherwise, confirming a protest that takes up where the General Strike of Oct 14 left off and confirming furthermore the unions’ bitter resistance to one particular section of the contentious 1995 Finance Bill, namely that dealing with state pensions.

The pensions issue has long been a nettle that no Italian government was willing to grasp. Economic analysts have for long argued that Italy’s state pensions schemes were far too generous in that they allowed Italians to retire on up to 80 per cent of their final salary.

Furthermore, until this year it was possible to retire on a good pension after only 15 years of contributions. In practice, a worker who began working at the age of 20 in a bona fide job paying social security contributions could retire on more than half salary at the age of 35.

The generous terms of the state pensions schemes, mostly run by the cash strapped state pension organisation INPS, are nothing if not onerous. In 1995, INPS’ losses are set to climb to 52 billion dollars, more than half Italy’s entire projected budget deficit for that year.

A third of the state’s total annual expenditure is used to cover pension costs with payouts far exceeding contributions.

Exacerbating the onerous costs of the pensions scheme is the consideration that Italy has a rapidly aging population with a zero growth rate. Currently, Italy has some 20 million pensioners, just over one in three of the total population, and that number is set to rise.