Renzi reforms set to continue after Italy day of protest

Prime Minister Matteo Renzi's ambitious plans to transform Italy remained on track Friday after a day of protest over his government's economic policies sent tens of thousands onto the streets but failed to deliver anything resembling a knockout blow.

Labour unions said some 40,000 people had turned up in Rome to voice their opposition to Renzi's labour market reforms, while many more had stayed away from work across the country in response to their call for an eight-hour general strike.

But with the numbers pounding the pavements down from previous waves of demonstrations and the tone boisterous rather than explosively angry, all the signs were that Renzi had emerged unscathed from his latest toe-to-toe with the country's once influential labour organisations.

The Rome demonstration was one of around 50 across Italy in what the unions intended to be a show of anger over measures Renzi has defended as necessary to stimulate the country's moribund economy and remedy sickly public finances in line with eurozone rules.

"Today there has been an extraordinary response from workers opposed to the Renzi government's policies," Maurizio Landini, one of the most best-known and most militant of Italy's union leaders, told a rally in the northern city of Genoa.

"The piazzas are full, not just here in Genoa but in all of Italy."

Dozens of flights were cancelled or rescheduled and there was only a minimum or partial service on most forms of public transport.

The focus of the protests was Renzi's "Jobs Act," which seeks to stimulate job creation and new hiring by making it easier for companies to lay employees off while reducing severance rights in the initial years of a worker's contract.

Unions also decry what they term as insufficient efforts to stimulate economic growth against a backdrop of record unemployment, which for 15-25 year-olds now stands at over 43 percent.

The strike and demonstrations were scheduled weeks before Renzi successfully fast-tracked the new labour market legislation through parliament, leaving Friday's events with a largely symbolic feel.

The strike was called by Italy's biggest union grouping, the CGIL, and two smaller confederations, the UIL and UGL.

The Catholic-linked CISL group of unions, which is the second biggest by membership, did not back the strike call, saying it would be counter-productive in the current context of an economy in recession for the third time in seven years.

Although he is the leader of the Democratic Party, partly rooted in Italy's once mighty Communist Party, Renzi has been willing to take on the unions over their defence of what he sees as an archaic labour market system.

In a break with established tradition, he has also completely sidelined union leaders from discussions on the country's economic direction.

- Popularity hit -

That has increased social tensions with protests in October and November occasionally spilling over into violence.

"The government has to choose between conflict and dialogue," Susanna Camusso, the Secretary General of the CGIL, warned on Friday.

UIL leader Carmelo Barbagallo added: "Today we have brought Italy to a standstill in order to start again in the right direction."

Renzi's popularity has taken a hit over the last month as the debate over his reforms has rumbled on with no sign of a turnaround in the economy.

But he continues to enjoy approval ratings most other leaders would love to have and both polls and anecdotal evidence suggest most voters back the 39-year-old's drive to shake-up Italy.

At the end of October, when there was still a chance of blocking the Jobs Act, there were hundreds rather than tens of thousands of protestors on the streets of Rome.

The Jobs Act is only the first stage of a broader programme of reform for Renzi which also includes an overhaul of the country's snail-paced judicial system and electoral reform aimed at producing stable governments with clear parliamentary majorities.

Renzi has often derided the unions as dinosaurs operating in a world that no longer exists, notably saying last month: "If the unions want to negotiate (on economic policy), they should get themselves elected to parliament."

But in his only comment on Friday's strike, he struck a more conciliatory tone.

"The general strike is a moment of protest of great importance. We have a lot of respect for it even if I do not agree with the reasons for it. Good work to those who are working and good luck to those who decide to strike," Renzi said in a statement on Thursday.