April 2 (Bloomberg) --Italy’s jobless rate rose to the highest in more than a decade in February as austerity measures meant to fight the debt crisis helped push the euro area’s third-largest economy into a recession.
Unemployment increased to 9.3 percent in February, the highest since the first quarter of 2001, from a revised 9.1 percent in January, Rome-based national statistics institute Istat said in a preliminary report today. The jobless rate matched the median forecasts of six economists surveyed by Bloomberg News.
Prime Minister Mario Monti is implementing a 20 billion-euro ($26.7 billion) package of spending cuts and tax increases to eliminate the budget deficit next year and trim the nation’s 1.9 trillion-euro debt. Those measures are weighing on growth, with the European Commission forecasting on Feb. 23 that the Italian economy will contract 1.3 percent this year.
Euro-region unemployment rose to 10.8 percent in February the highest in more than 14 years, the European Union’s statistics office n a separate report today.
Joblessness among the Italians between ages 15 and 24 increased to 31.9 in February from a revised 31 percent in January, Istat said today. Unemployment in the fourth quarter reached 8.8 percent, up from 8.4 percent in the third, Istat said today.
Fiat SpA, Italy’s biggest manufacturer, shut down its Termini Imerese factory at the end of last year as part of a plan to reduce costs and improve productivity in Italy as sales in the country slump. Fiat has threatened to cut more production in its home market.
Monti’s Cabinet passed proposals on March 23 for an overhaul of Italy’s labor market, saying the changes will help attract investment and bring down the jobless rate even with the economy in its fourth recession since 2001.
The draft law approved by the government, which expands jobless benefits, reduces temporary work contracts and allows more leeway in firing, has yet to be presented to lawmakers.
“It still needs to go to parliament, which I hope will happen quickly,” Monti told reporters after speaking today at the opening of the Boao Forum for Asia in the province of Hainan, China.
“The reform must be passed with urgency,” Deputy Finance Minister Vittorio Grilli said March 31 on the sidelines of a meeting of European Finance chiefs in Copenhagen. He said that joblessness “can only rise” during the recession and urged lawmakers to approve the overhaul with a “speed comparable with other measures” proposed by the government since Monti became premier.
Istat originally reported a jobless rate of 9.2 percent in January and a youth unemployment rate of 31.1 percent.