ROME: Italy's parliament was set on Wednesday to approve a controversial labour market reform so Prime Minister Mario Monti can go to a key Brussels summit with it in hand to reassure his EU partners.
The reform, which Monti's government says is key to restarting growth in the recession-hit economy, will get final approval the day before the summit, as Italy races to prove it is doing what it takes to stave off the debt-crisis.
Rome had called on parliament to make sure the reform is given the stamp of approval in time, but Monti -- whose technocratic government depends on the support of bickering coalition parties -- has had to compromise on details.
Addressing parliament on Tuesday, Monti said it was "important that Italy arrives at the summit with the force of a parliament-government tandem."
The project, which was unveiled in March after months of bitter disputes with trade unions, is based on the Danish "flexicurity" model, which aims to ensure both flexibility and security in the labour market.
It includes incentives for employers to hire workers but also eases the procedure for letting them go in case of a downturn, and will help young people get jobs though apprenticeships, in a country hit by high youth unemployment.
Workers will also all be eligible for a modernised welfare scheme from 2017.
Greater labour flexibility is one of the reforms European and international financial bodies have long advised Italy to adopt to invigorate its economy.
Labour Minister Elsa Fornero has constantly defended the reform, insisting that it is favourable for young people and those starting out in particular.
"No-one has ever claimed to have the key to the solutions to the many problems in the labour market in their pocket, but it is a good reform which strikes a balance," Labour Minister Elsa Fornero told Rai radio on Wednesday.
But Monti's original package was watered down as parties, trade unions and employer groups fought to bitterly defend their own corners, leaving many economists fearing the reform is too timid to shake up the labour market.
And he has promised it will be modified further in upcoming legislation.
"Europe and the markets will appreciate the fact that the reform has been approved, but will also be well aware that there will be corrective measures introduced in the next few weeks," the left-leaning Repubblica daily said.
The premier's determination to convince EU colleagues that Italy is in a strong position to fight off the crisis will be increased by Rome's poor bond session Wednesday, when it had to pay much higher rates on two-year bonds.
The centre-right has insisted the reform leave businesses wiggle room to give people rolling shorter-term contracts, while the left has demanded greater measures be included to protect precarious workers.
The country's biggest union, the left-wing CGIL, still insists that the reform risks increasing unemployment, while Italy's Confindustria business association says it does not go far enough in strengthening employers' rights.
The CGIL has called for a mass protest against the reform in front of parliament on Wednesday afternoon, as the project goes to the vote.
As Italy comes into the debt-crisis crosshairs once more, with rising borrowing costs and a massive debt pile, political and social parties across the spectrum are being forced to fall into line.
But with grumblings of dissent from the parties -- particularly within the centre-right PDL, founded by ex premier Silvio Berlusconi -- there are concerns the grudging support offered to Monti may not be enough to reassure the EU.
"It seems Monti is pedalling the parliament-government tandem nonstop... but the others just look on, as sceptical rather than interested spectators," the Corriere della Sera said.
"This fuels questions besieging Italy, which centre in Western chancelleries and mass media on the unknown of what will come post-Monti," it said.
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