WHILE many people’s eyes were on Greece, another southern European country was taking a very different approach to easing its economic plight. On February 20th Italy’s left-right coalition headed by Matteo Renzi approved two decrees enacting the core of an employment reform that parliament had broadly endorsed last year. The measures aim to close a yawning gap between Italy’s labour-market “outsiders”, who are mostly younger workers on short-term contracts with scant entitlement to welfare benefits, and the protected “insiders”, typically older workers, who enjoy both job security and the certainty of an adequate pension. The reform sweeps away a skein of temporary contracts, replacing them with one that affords new employees progressively greater safeguards until, after three years, they become entitled to a permanent job. On the other hand, the reform ends the right to reinstatement of workers judged to have been unfairly fired. (That entitlement will now be reserved mainly for victims of discrimination.) Compensation will be given instead. That nullifies a clause in Italy’s 1970 Workers’ Charter that the...