In this issue:
REAs probably protected by Industrial Relations Act 2012
Ballot on industrial action in Bus Éireann
SIPTU manufacturing conference launches declaration on workplace innovation
Agreement reached in Killarney Golf Club dispute
Strike action deferred at Shanganagh Waste Water Treatment Plant
Historic banners to the fore in Dublin May Day march
May Day in Belfast
Congress says time to abandon failed austerity and build a fair recovery
SIPTU calls for caution in regard to use of internships
Survey finds that 94% of young people do not want to emigrate
SIPTU welcomes C&AG report on Skills Programme fund
Nash questions closure of National Ambulance Control Centre
SIPTU welcomes ECJ court ruling in favour of Waterford Crystal workers
James Connolly Bridge campaign petition
SIPTU welcomes auditing of Department of Education building projects
SIPTU shop steward elected on to St. James Hospital Board
SIPTU meets with Diamond Innovations management to discuss threatened job losses
MANDATE Trade Union
Derry May Day and the Factory Girls
Minister for Children and Youth Affairs to meet with youth workers
Galway’s trade union heritage celebrated
End Bangladesh's anti-union laws
View of Dublin City from the top of Liberty Hall
Caution needed over IBEC call to ease back on austerity
Global Labour Column
Action X Protest
James Connolly Memorial Lecture
Darkness into Light 5K Walk/Run
Fair Hotel
Book Sale in aid of Docklands Senior Provider Forum
Larkin Credit Union
The James Plunkett Short Story Award
Supporting Quality Campaign!
SIPTU Basic English Scheme
VHI Health Insurance
SIPTU Membership Services - Travel Insurance
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Global Labour Column
By Paolo Borioni

The historical sources of the Italian crisis
The Italian economic crisis has global as well as domestic roots. As Italy depends on industrial exports, the country has been deeply affected by the global crisis, and even more so by the depressive results of the EU’s austerity measures. Mario Monti’stechnocratic government has also added to depressive austerity: the Italian internal market shows a negative growth, below -2% in 2013, adding to Italy’s need for exports.

Italy was one the fastest growing industrialised European countries between 1950 and 1990, performing better than Germany.3This was partly due to its newcomer identity characterised by low wages which helped competitiveness at the beginning ofthis period. The economic landscape was further marked by the presence of a few major enterprises (including Fiat, Pirelli, Olivetti) and big state-owned enterprises (Ansaldo-Breda, Fincantieri,Eni, Enel, etc.). Large companies provided long-term investment and innovation, facilitating the emergence of plenty of successful Small and Medium-Sized Enterprises (SMEs)4 in the so-called “third Italy”. The success of SMEs was founded on their embeddedness in a dynamic economy dominated by large firms, whose investment in research and technology also benefited SMEs.

SMEs provided the Italian system with the much praised “flexible specialisation”. They were a segment of mostly formal, but also “informal”, producers often connected to national or foreign large-scale manufacturing, and were able to adapt to rapidly changing global and national demand. Also, many of these SMEs grew bigger and smarter: 5000 of the most competitive ones eventually developed into something quite similar to the German Mittelstand. They are the reason why, even in the face of current economic hardships, the country manages to achieve a commercial surplus.

Nevertheless, many other SMEs have suffered the consequences of the past 30 years of economic policies affected by neoliberalism, financialisation, rigid and inflation-obsessed Euro parameters. Financialisation and globalisation convinced large enterprises like Fiat to withdraw long-term and innovative investment from Italy. Neoliberalism added to this process by discrediting the key task of public enterprises as providers of long sighted research and development, despite the evidence that companies such as Finmeccanica and Eni are an unquestionable exampleof innovation. Moreover, Euro parameters hampered EU internal demand and rendered devaluation impossible. Hence,the historical basic elements of long-term innovation and SMEs virtuous selection was weakened, and the “economic miracle” of1950-1990 vanished.

Neoliberalism, financialisation and wrong social incentives In the new century Italy remained largely an industrial country, refraining from the financialised short-term outlook and private indebtedness (the real source of the worldcrisis) popular in Spain and Anglo Saxon countries. But the Italian economy was nonetheless hit particularly badly by the crisis because of its significant weaknesses. On the one hand, it would have needed another couple of decades such as the “glorious” ones after WWII to get rid of its “newcomer” features, such as the excessive size of the informal labour market, low-wage labour, the average small size of firms and the tendency towards tax evasion as aremedy for competition/insufficient credit to investment. On the other hand, the effects of long-term innovation investment, implementation of labour rights plus higher employment rates in the southern regions of Mezzogiorno needed to be more thoroughly implemented.

If big and especially state owned companies had had theopportunity to play their role in research and development for longer, the results could have trickled down to a large portion of key SMEs, which would have rendered the economy as a whole stronger. This would have been crucial especially for the less developed south: the incentives to a non-newcomer type of competition and investment (strong and more thoroughly protected labour rights, or a less tolerant fiscal system) would have become a ubiquitousand solid reality.
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