Welfare Minister Maurizio Sacconi warned that there were few options left for the cash-strapped carrier.

BBC: Crunch talks for ailing Alitalia

Maurizio Sacconi, a former minister in Mr Berlusconi's cabinet, called the move "courageous and generous", saying it would help do just that.

BBC: Silvio Berlusconi: 'No plans to stand in 2013'

The privatisation of labour exchanges and changes to apprenticeship contracts will inject even more flexibility into the Italian labour market, promises Maurizio Sacconi, the minister responsible.

ECONOMIST: So easy to pinpoint what is wrong, so hard to put it right