Italy needs 20 years to tackle jobless rate: IMF

The International Monetary Fund (IMF) has dampened the optimism over Italy’s recovery after saying it will take almost 20 years for the country to get its unemployment rate down to pre-crisis levels.

Italy needs 20 years to tackle jobless rate: IMF
Unemployment in Italy currently stands at 12.4 percent. Photo: Filippo Monteforte/AFP

In its report on the eurozone on Monday, the IMF said that “without a significant acceleration of the growth rate”, it will take Italy “almost 20 years to reduce the unemployment rate to pre-crisis levels.”

The IMF was slightly less pessimistic about Spain, which will need ten years to achieve the same, while Portugal will also require 20 years.

Italy’s jobless rate, which currently stands at 12.4 percent, has almost doubled since 2008.

But Italy’s treasury hit back, saying the data did not take into account the labour reforms enacted at the beginning of the year, which has led to a 21.9 percent rise in the number of permanent job contracts given, compared to 17.11 percent last year, Corriere reported.

The IMF also urged the Italian government to swiftly “adopt and implement” the planned civil service reform, which should include measures on the provision of local services, competition for public contracts and management of human resources.

The dismal IMF forecast comes a few weeks after Italy’s central bank said the country’s public debt level had hit a new record of €2.2 trillion in May, up by €23.4 billion in a month.

Italy’s public debt of more than 130 percent of GDP is second only to Greece in the eurozone.

The outlook also comes two months after the IMF raised its growth forecast for Italy to 0.7 percent this year, from 0.2 percent, and to 1.2 percent in 2016 from 1.1 percent.

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EXPLAINED: How to claim Italy’s €200 cost of living bonus

The Italian government is sending one-off €200 payments to cushion the rising cost of living, but they won't be automatic. Here's the latest on how the process works.

EXPLAINED: How to claim Italy's €200 cost of living bonus

The €200 cost of living bonus was announced in May 2022, alongside several government measures aimed at offsetting the increasing cost of living, as The Local reported.

Employees, as well as the self-employed, pensioners and the unemployed, will be eligible to receive the €200 payment if they have an annual income of under €35,000 gross, according to a decree law passed in May.

READ ALSO: Who can claim Italy’s €200 cost of living bonus?

However, the bonus is only automatically made to those who are state employees or pensioners. Those in these categories will be identified by the Ministry of Economy and Finance and INPS and receive €200 along with their salaries or pension payments.

What if I work in the private sector?

Employers working in the private sector should receive their payments in their July pay packet. First, however, they need to submit a self-declaration (autodichiarazione) form to their employer, who will pay the sum with the July pay check and then recover the funds from the state later.

The decree doesn’t specify a deadline for the submission, but as the payments should be made in July, the paperwork needs to be filed before that – so you’ll need to talk to your employer and arrange it.

READ ALSO: EXPLAINED: The rules and deadlines for filing Italian taxes in 2022

The self-declaration serves to establish that the worker has all the requirements to be a beneficiary. That means the person does not go over the income ceiling for the benefit, for example.

You will also have to declare that you will not receive a €200 bonus from other sources, such as from being a recipient of the citizen income or through another employment relationship.

How can other workers apply?

Italy’s government expanded the bonus payment scheme to more people in early May, as The Local reported.

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ were added to the categories of people in Italy eligible for a one-off €200 payment.

These other categories of workers will not receive automatic payment, though. Instead, they need to make a special request to INPS to receive the bonus.

There are different deadlines for different people, so ‘domestic workers’ (lavoratori domestici) need to apply by September 30th. Other workers, such as seasonal, for example, have until October 21st.

You can apply for the bonus on the INPS website, which indicates that the payments will be made at an unspecified later date.