In the News

Alitalia Bankruptcy, Employment Woes

One of Italy’s biggest recent news stories, which is sending shock waves through the Italian economy, is the bail-out plan for Alitalia, the country’s largest airline carrier, which declared bankruptcy on August 29, 2008. Prime Minister Berlusconi and others are calling for a merger between the ailing company and its chief competitor, Air One, with a group of Italian investors taking control of the new company with a billion euro investment. Berlusconi warns that unions’ failure to accept the plan would result in about 20,000 lost jobs, whereas acceptance of the plan might result in under 5,000 jobs lost.

This comes at a time when the declining economy is producing fewer demands for workers. Unemployment in the eurozone reached a fifteen year low of 7.2% in May, and in early September Monster Worldwide Inc.'s index of online job advertisements in seven European Union countries, including Italy, dropped to its lowest since January. Demand in all sectors fell, with hospitality being one of the most affected. According to Bank Italia figures, foreign tourism remained strong through May, the most recent month for which figures are available, but the employment figures may indicate a current drop in tourism and dining out.