Companies in Italy's under-developed south that hire the young and unemployed will receive total tax relief from the state, Italy's centre-left prime minister Matteo Renzi said on Wednesday.
"Companies that decide to employ people in the south will have the total suspension of contributions, like in the first year of the Jobs Act," Renzi said, referring to his labour reforms which entered into force last year.
The government has set aside 730 million euros for the measure, Renzi told unions in the Sicilian city of Caltanissetta on Wednesday.
Italy's labour minister Giuliano Poletti said mandatory employer social security payments will be suspended for a year from 1 January for companies who permanently hire people aged 15-24 or who have been jobless for at least six months and were in the workforce for at least 24 years.
"Reducing youth unemployment, especially in the South, is a government priority," Poletti said.
Hailing economic data on Tuesday that showed a return to modest growth from July-September - when the economy expanded 0.3 percent - Renzi cautioned that southern Italy needed "kick-starting" to recover from the recession.
"The problem is that the north has bounced back from the economic crisis while we have a south that has been clobbered by it," Renzi stated.
