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Transcription of the intervention of Italian Prime Minister Mario Monti at the European Business Summit

26 Aprile 2012

Monseigneur, Mr. President of the European Council, Monsieur Le Premier Ministre de Belgique, Mr. President of Business Europe, Monsieur Le President de la Federation des Entreprises de Belgique, Ladies and Gentlemen

I’m very honored by the invitation of Business Europe and FEB to speak at this important conference. The topic of this opening session is how can skills get Europe out of the crisis. I will take the liberty to interpret the word “skills” in two different ways: one is more obvious and pertinent to this conference, namely “professional skills”, the second slightly more daring, but I believe ultimately even more important, is in the sense of how can policy skills get Europe out of the crisis, because I believe that it is the factor which is in shortest supply at the moment in spite of so many good individual and collective efforts.

Professional skills at all levels of professional and labor qualifications are of course crucial and I believe that the emphasis that business organizations in Europe have been placing in recent years on this are to be commended as is the orientation given on many occasions by the European Council and the European Commission on this crucial factor for European growth.

This means that there are at least two implications regarding the broader policies scenario: one is that in this age of budgetary consolidation we would be well advised to preserve as much as possible the space for resources for training and for universities and for research of all types, fundamental and applied, and that all this needs to be encouraged. The second, is that it is indeed crucial to enhance workers’ skills as is obvious for those of us who have been engaging in labour market reforms in their respective countries. In the case of Italy this took place in the last couple of months and the labour market reform is now in the Parliament to be approved rapidly.

The Italian labour market reform addresses, I believe, two fundamental specific objectives that need to be taken into account if, as is the case of Italy, you are a big manufacturing nation, and this is the promotion of apprenticeships as the main port of entry towards a decent and sustainable work life, not to be used and abused as a source of cheap or free labour as sometimes has been the case. People are more likely to be productive if they are well trained and have a lasting relationship with the company they work for. The other key aspect of the Italian labour market reforms that was badly needed consists in moving towards the model of flexsecurity, which combines flexibility to the benefit of companies with security for people, as opposed to specific jobs, and conditionality requirements for what concerns access to subsidies as well as a number of very active labour market policies to help people into the labour market and assist laid off workers to quickly find new employment, hopefully with an upward adjustment in their skills. I believe that labour market reforms are a power vehicle for the skills that can get Europe out of the crisis because inflexible labour markets - I would call that ‘inflexsecurity’, in other words the combination of inflexible labour markets with the protection of individual jobs, are a huge distraction of scarce public finance resources into ultimately unproductive destinations and do not enable an upward training of workers skills.

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