Italy's public sector unions have called off planned strikes after reaching a last-minute deal with Prime Minister Romano Prodi on a hike in salaries and renewal of their contracts, the unions involved said.
The strikes, called for Friday and Monday, had threatened to keep roughly 3 million people away from work, involving everyone from public transport employees to teachers and civil servants. The deal, which should help ease tensions that have been running high between the government and unions, comes just after Prodi lost key northern seats in local elections at the weekend.
"There are no winners or losers, the deal is a first important step towards reforming the public administration," said Raffaele Bonanni, leader of the CISL union. "Now we can talk about how to improve productivity and reward merit." The government and the unions are still locked in difficult negotiations over planned pension and welfare reforms.
"I was right to be optimistic, it's a useful agreement," said Labour Minister Cesare Damiano. The public sector wage deal, struck in the early hours of Tuesday, agrees an average monthly salary hike of 101 euros, or around 4.5 percent, which will be retroactive from February this year, the unions said.
However, public sector workers' previous two-year wage contract expired in January 2006, meaning that the new deal, which will probably come into effect in September, will formally be up for renewal again five months later.
Italian wage contracts are often renewed long after they have expired. The unions agreed "experimentally," to a government request that the next contract, to run from 2008, will last for three years rather than two, and will also address the problem of public sector productivity.
The strike will be formally revoked later on Tuesday, the CISL union said. "I'm sorry that this agreement was made only now, it could have been done much earlier," said Guglielmo Epifani, the secretary-general of the largest union confederation, the CGIL.