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

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

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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.

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Mr Sacconi claims that, in the past five years, Italy has created a net 1.2m new jobs, 700, 000 of them for women, a better record than any other country in Europe (including Britain).

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Yet although unemployment for Italy as a whole, now just under 8%, is relatively low by European standards, Mr Sacconi acknowledges that it remains high among the young (almost 23%), the old and in the south.

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Maurizio Sacconi, a junior welfare minister, one of the architects of the proposed changes to Article 18, reckons this should be only a first step to fight the black economy and make the labour market more flexible.

ECONOMIST: Italian labour law and politics