Aurelia Butler

ROME (Reuters) – Marta Pizza, a 26-year-old swimming instructor, has worked at a Rome sports centre for the last two years earning 8.50 euros per hour with no pension contributions, sick pay or holidays. Italy’s right-wing government is taking steps to facilitate temporary and informal work arrangements like hers, rolling back previous restrictions and angering trade unions, who say the move will exacerbate in-work poverty and stagnant productivity. New Prime Minister Giorgia Meloni’s government argues that more flexibility will mean more jobs, and induce employers to legalise workers previously not declared at all.The euro zone’s third-largest economy has a growing army of workers without stable contracts – around 5 million out of 23 million employed people, according to a study by Italy’s largest union, the CGIL.Like her fellow swimming instructors Pizza is not on the sports centre’s roster of permanent staff, and her contract does not allow for regular shifts. Yet the reality is very different.”We all have weekly shifts assigned and there is no limit to the number of hours we can work,” says Pizza, who boosts her income helping out as a baby-sitter, cleaner and waiter. In recent years some euro zone countries have sought to rein in temporary contracts to promote stable jobs. In Spain, the European Commission even made it a condition for receiving billions of euros in EU pandemic recovery funds.Meloni is moving at least partly in the opposite direction. Her first budget extended some tax breaks for permanent hiring introduced by previous governments, but also increased the scope for the use of job “vouchers”.These are an extreme form of labour flexibility that was largely scrapped in 2017 after an outcry by trade unions, which were promoting a referendum to abolish them. Under the system – even less structured than Britain’s so-called zero-hours contracts – workers are paid through the state welfare agency using vouchers which the employer buys online for 12.5 euros ($13.62) each. The worker gets nine euros for each 12.5 euros of face value, with 3.5 euros going to cover insurance and pension contributions.There is no contract, so workers have no right to sick pay, holidays, leave or jobless benefits when their employment ends. Vouchers are popular among businesses, but critics say they leave ample room for abuses.FLEXIBILITYGovernment members close to Meloni say she is also preparing to relax curbs on other forms of short-term work.Under rules imposed in 2018 workers can be hired on a temporary basis for 12 months without restrictions. This can be extended to 24 months under strict conditions such as an unexpected surge in business or to substitute other staff.These rules were already somewhat eased in 2021 during the COVID-19 crisis, and now Meloni intends to go further, something that concerns some experts such as Michele Tiraboschi, a labour law professor at Modena University. “Vouchers and short-term contracts offer firms temporary relief by cutting their costs, but the last 25 years have shown us we should be focusing on the quality of work, on training, on raising productivity to enable higher salaries,” Tiraboschi said.The government will either allow firms to hire workers on temporary contracts for two years without giving any reason or it will broaden the reasons that can be given, officials say. These contracts will possibly be extendable to three years under certain conditions and with trade union agreement.It also plans to reduce the labour tax costs to employers of temporary contracts, which were raised in 2018. A decree is likely to be presented next month.”Flexibility should be seen as an asset and an opportunity, not as a problem,” said Paola Mancini, a senator with Meloni’s Brothers of Italy party. “Restrictions for businesses have to be cut.”SPANISH ALTERNATIVE Spain, southern Europe’s other major economy, has taken an opposite path, with encouraging results. Temporary contracts in Italy and Spain https://fingfx.thomsonreuters.com/gfx/mkt/lbpggbrbkpq/LFSQ_ETGAED_LINE_2023-01-26T15_26_23Z.png It has the second-highest ratio of short-term workers among the 27 EU countries, at 20.3%, according to Eurostat data for the third quarter of 2022, while Italy is third on 17%.The Spanish percentage was down from 26.1% a year earlier, however, while Italy’s remained stable.A revamp of Spain’s labour rules in March last year has led to a 141% rise in young workers with permanent contracts, official data for December shows.The reform reversed the easy hire-and-fire regime put in place after the sovereign debt crisis a decade ago by abolishing most forms of temporary contracts.It also included a provision to give permanent contracts to seasonal workers in sectors such as tourism and farming. They are entitled to benefits even when not working and can be called up by their employers at any time.Madrid says the reform was a driver of last year’s 5.5% economic growth rate, increasing people’s financial stability and boosting confidence and consumption.In Italy, since 2008 the number of employed people has remained stable at around 23 million. Within that total, the number of temporary workers has jumped by 25% from 2.4 million to 3.0 million. Unstable work on the rise https://fingfx.thomsonreuters.com/gfx/mkt/jnvwywqjmvw/ITALY-UNSTABLE-WORK.jpeg Tania Scacchetti, a leader of the CGIL union, said both the use of vouchers and the encouragement of temporary contracts were driven by an old, free-market model which puts workers in an “instability trap”.”We’ve increased the number of workers but the work is badly paid and precarious. Stable contracts should be the norm, not the exception,” she said.($1 = 0.9181 euros) More

The restructuring package will allow individuals and companies to catch up with unpaid tax and social security debt, in a move seen to gather support for for Turkish President Tayyip Erdogan ahead of tight elections to be held in May.The analysis showed tax offices will be able to collect 43.5 billion lira from some 521 billion lira receivable, while the social security institution is expected to collect 47.8 billion lira from 196 billion lira outstanding as part of the law.The draft law includes scrapping public debt below 2,000 liras, meaning the public institutions will give up collecting some 4.6 billion lira, according to the analysis.The government has already ramped up spending, including dropping the retirement age requirement for millions and substantial hikes to minimum wage and pensions.Last week, Erdogan announced the planned draft and said it will enable restructuring of debt to tax offices, customs offices, municipalities.($1 = 18.8079 liras) More

OSLO (Reuters) – Norway’s wealth fund, one of the world’s largest investors, posted a record loss of 1.64 trillion crowns ($164.4 billion) for 2022, bringing to an end a three-year run of soaring profits as stocks and bonds were hit by the Ukraine war and inflation.The previous largest loss was 633 billion crowns in 2008.It ends a record-breaking streak for the fund, where annual returns exceeded one trillion crowns in each of the three years from 2019 to 2021, amounting to more than four trillion crowns combined.”We are invested in 9,000 companies in 70 countries. There is just nowhere to hide,” fund Chief Executive Nicolai Tangen told a news conference.The single biggest stock market loss came from the fund’s stake in Amazon (NASDAQ:AMZN), which declined in value by 56 billion crowns, followed by a loss in shares of Facebook (NASDAQ:META) owner Meta Platforms of 52 billion and in Tesla (NASDAQ:TSLA) with 47 billion. Still, despite the record loss, the value of the fund rose overall by 89 billion crowns or $8.9 billion year-on-year, partly due to the weak Norwegian currency and a record 1.1 trillion crowns of cash inflows.The inflows in 2022 were nearly three times the previous record, of 386 billion crowns, set in 2008.The fund invests the Norwegian state’s revenues from petroleum production. As a major crude exporter and Europe’s largest gas supplier after a drop in Russian gas flows, Norway benefited from high energy prices due to the war in Ukraine. Graphic: Market value of Norway’s wealth fund- https://www.reuters.com/graphics/NORWAY-SWF/RENEWABLES/zgvobrgwxpd/chart.png “We have to be very conscious of the fact that the inflow came against a tragic backdrop in Europe,” Tangen said. “But it is an isolated mathematical fact that when oil and gas prices are higher, there is more revenue to the (Norwegian) government and more inflow into the fund.”The fund owns on average 1.3% of all listed stocks. It also invests in bonds, unlisted real estate and renewable energy projects.Looking ahead, Tangen said inflation would continue to be a worry.”Inflation remains a risk factor and, in particular, tied into what will happen when China really kicks in on the consumption side because it could drive a lot of prices globally,” Tangen told Reuters. “And then of course we have still geopolitical hotspots.”The fund’s return on investment in 2022 stood at minus 14.1% for the year, which was 0.88 percentage point better than the return on the fund’s benchmark index. ($1 = 9.9752 Norwegian crowns) More

LONDON (Reuters) -More companies suffered insolvency last year in England and Wales than any time since 2009, government figures showed on Tuesday, reflecting the end of coronavirus pandemic support that helped many smaller businesses stay afloat.Total insolvencies rose to 22,109 in 2022, their highest since the global financial crisis and up by 57% from a year earlier, according to data released by the British government’s Insolvency Service agency.Part of the increase in the number of companies falling into difficulty reflects the higher number of companies overall.The rate at which companies are being liquidated rose by 50% last year, but is only the highest since 2015 and around half its peak rate in 2009.That said, the challenges for many businesses have worsened over the past year as inflation has pushed up the cost of raw materials, wage bills have risen and higher Bank of England rates increased the expense of borrowing.”It seems likely that corporate insolvencies will remain high and increase further in Q1 2023 and beyond,” said John Cullen, business recovery partner at accountants Menzies.The increase in insolvencies last year was driven by the commonest type, creditors’ voluntary liquidations (CVLs), which dropped sharply in 2020 and early 2021 when the government provided COVID support loans to more than 1.5 million small businesses.CVLs rose last year to their highest number since records began in 1960, and were 21% higher than if they had risen in line with their pre-pandemic trend, the Insolvency Service said. Compulsory liquidations were back at their pre-pandemic level by the final quarter of 2022, after legal restrictions on forcibly winding companies up ended in March.Cullen said there was now a backlog of overdue tax bills, which under normal circumstances would often have led to compulsory liquidations.”One of the reasons we’re seeing an increase in administrations and CVLs at the moment is that HMRC (tax office) is not able to pursue all of its debts as quickly as it would normally, given the number of defaulting companies and its own struggle to recruit staff,” he said. More

A Chinese oil broker whose activities were exposed by a Financial Times investigation has been arrested in South Korea on suspicion of organising illegal transfers of diesel to North Korea.The broker is suspected of arranging more than 35 transfers amounting to 18,000 tonnes of diesel, in deals valued by the South Korean coastguard at Won18bn ($14.6mn).Investigators from the South Korean coastguard said the agent arranged for a Russian oil tanker operated by a South Korean oil company to conduct ship-to-ship fuel transfers with a Chinese vessel in the South China Sea. The Chinese ship then conducted ship-to-ship transfers with North Korean vessels, a violation of UN sanctions.Last month, a joint investigation by the FT and the Royal United Services Institute think-tank tracked a delivery of marine oil last year from South Korea’s south-east coast into North Korea’s exclusive economic zone. The investigation revealed that an unnamed Chinese shipping agent had brokered a deal between a South Korean company called Eastern Pec and a Shanghai-based company called Met Ocean Co to conduct a fuel transfer in the South China Sea. The marine oil was transferred from South Korea to a meeting point by Eastern Pec using a Russian oil tanker called the Mercury, which it had chartered from a company based in Vladivostok. The cargo was then transferred to a Chinese ship called the Shundlli, which was operated by Met Ocean.

In a “letter of guarantee” seen by the FT, Met Ocean promised Eastern Pec not to deliver the shipment to North Korea. But satellite imagery and tracking data show the Shundlli going on to conduct an apparent transfer with a second ship in the North Korean EEZ.The shipping agent, who is a naturalised South Korean national, was arrested on Saturday. On Tuesday, the coastguard confirmed he was the same person who brokered the deal between Eastern Pec and Met Ocean. Authorities took action amid fears that the agent could become a flight risk after his activities were revealed.The broker was detained on charges relating to shipments conducted between October 2021 and January 2022, which do not involve the Mercury, the Shundlli or Eastern Pec, according to authorities. Investigations into the operation exposed by the FT are ongoing, they added.“The FT report helped us broaden our investigation, enabling us to ask the broker about other deals that he was involved in,” said a Korean coastguard official. “We are also investigating his other activities involving the Mercury and Eastern Pec.”Eastern Pec has said that the operation revealed by the FT was the first time it had worked with the broker.The UN Security Council imposed a cap on permitted oil transfers to North Korea in 2017 after Pyongyang’s sixth and most recent nuclear test. The ceiling of 500,000 barrels a year is far below the energy needs of the North Korean economy.All such oil transfers must be reported to a UN sanctions committee, but in practice, only a fraction are. An unreported transfer constitutes a violation of the sanctions.Go Myong-hyun, a sanctions expert at the Asan Institute for Policy Studies in Seoul, said that the transfers helped prop up North Korea’s shattered economy, as well as Pyongyang’s capacity to train and field its armed forces and sustain its weapons development programmes.“No matter how large or small, what this shows is that the South Korean authorities need to identify these operations and crack down on them hard,” he said. More