Retirement Age Boost Pushes Italians Into Streets

Until now, Italy, the third biggest economy in the European Union, has managed to avoid debt problems similar to those faced by Greece, Portugal and Ireland. Nevertheless, the country’s debt-to-GDP ratio of 120% is presently one of the highest in the eurozone and is way above the EU limit of 60 percent. Greece has already availed two joint bailout packages from the EU and the IMF to tackle its financial problems, while Ireland and Portugal have each been bailed out once. An EU bailout for Rome in those lines is considered to be unaffordable as Italy’s economy is twice that of the three stricken nations put together.

The Washington Post explained the European situation in light of recent statistics:

Household spending is expected to continue falling as governments cut budgets, slash public-sector payrolls and take other steps to trim deficits, and exports, the one bright spot for countries such as Spain and Ireland, are beginning to dip as the world economy slackens. The data cast ​“further doubt on the region’s ability to grow its way out of the debt crisis,” Ben May, European economist for research consultancy Capital Economics, wrote in an analysis of the latest figures…Italy, in particular, would strain the available euro-area resources if it needed to be rescued.

In Spain, the strike was specifically addressing proposed constitutional reforms that could cap any future budget deficits, drawing parallels to the ugliness around the U.S.’s recent debt ceiling debacle. The country’s two biggest unions have called for a public referendum on the measure. Al Jazeera explained:

Spanish Prime Minister Jose Luis Rodriguez Zapatero is desperately trying to calm market nerves about the country’s ability to service its annual deficits. Government spokesman Jose Blanco said Madrid was ​“very worried” because some countries were failing to meet their deficit-reduction targets, and this was affecting investor attitudes to Spain…Under the constitutional change, Spain must stick to a long-term deficit cap except in times of natural disaster, recession or extraordinary emergencies and even then only with approval of the lower house.

Last year Italy raised the retirement age as part of 25-billion-Euro budget cuts and austerity measures. The package froze public employee salaries for three years, reduced ministry and regional budgets and stepped up anti-tax evasion efforts. Regarding retirement age the Sydney Morning Herald explained:

Italy’s complex pension system allows for two options to retire. Men in the private sector and both men and women civil servants can currently retire at age 65, while women in the private sector can retire at age 60. By 2050, these ages will rise to 68 years and four months and 63 years and five months respectively…Alternatively anyone who has paid into the system for 35 years can currently retire at age 62, a figure that will rise to age 65 and four months…Those who work more than 40 years will be able to retire regardless of their age.

Italy’s eight-hour strike, which interrupted transportation and business across the country, was called by the CGIL union that represents two million public and private sector workers nationwide. The austerity measures also included a tax increase and – evoking attacks on public sector U.S. unions in the name of cost-saving – changes to federal law that would help employers bypass labor contracts and more easily hire and fire workers. Unlike in the U.S., the measure originally included increased burden on the rich, in the form of the tax evasion enforcement and a 3 percent ​“solidarity tax” on those making more than 500,000 Euros a year. However this tax was among parts of the package withdrawn in the face of opposition.

The New York Times reported that:

Susanna Camusso, the leader of C.G.I.L., called the change to the labor law ​“unjust” and threatened more strike actions if it weren’t removed. ​“If Parliament doesn’t strike this from the bill, they have to know that we will use every path and initiative possible so that this shameful measure is removed.”

The Times also quoted a public employee, 47-year-old Pasquale Nappo, outside the Piazza Navona in a butcher’s apron covered in fake blood to protest what he called ​“social butchery”:

The politicians don’t seem to understand and haven’t for years that they need to give people answers…They don’t understand that if I earn 1,300 euros a month, I can’t pay a rent of 1,200 euros, which is what it costs to live in Rome.

Massive labor- and budget-related strikes are relatively common in Europe, and Tuesday’s strikes in Spain and Italy actually drew fewer people than others in the past year or two. For example last Sept. 29, hundreds of thousands of workers participated in a 24-hour strike in countries including Italy, Spain, Belgium and Greece, against proposed Eurozone austerity measures, and threatened massive fines for countries failing to meet budgetary targets. More than 100,000 protesters poured into Brussels, where EU officials were debating the cuts, and the Irish parliament was blocked by a cement truck.

Some questioned whether the eight-hour strike on Tuesday was the best tactic in a situation where even unions acknowledge spending cuts are needed. The financial news outlet RTT reported that smaller unions eschewed the strike, fearing the impact on jobs. In the left-leaning Guardian newspaper in the UK, freelancer Sabina Castelfranco opined:

In this climate, and with growing public awareness that something must be done about the financial difficulties faced by the ordinary man in the street, many are questioning whether a general strike is really appropriate at this point in time. Many Italians question how effective the strike is going to be. Rome psychologist Gabriella Vaccher says holding a general strike now is useless: ​“All it’s going to do is take away €100 from the salaries of all those employees who are forced to strike.”