Reference no: EM132092184

Fiat concerns about high operating costs and significantly low productivity at Italian plants leading to a threat to move its production outside of Italy. This issue is exacerbated by the fact that Italian government pays Fiat workers their salary during their unemployment.Fiat says that without union concessions it may shift production abroad, where wages are as much as 70 percent lower. But as Italy gets sucked ever deeper into the debt crisis engulfing the whole euro zone and Fiat suffers an Italian market at its lowest ebb in 15 years, a revamped Chrysler is now the main source of revenues and profits for the combined group. Mr. Marchionne blames low productivity, high labour costs and rigid work contracts for the group’s losses on its home turf, and has engaged in a tug-of-war with unions and Italy’s industrial elite to overhaul labour agreements. The 22,000 employees in Fiat’s five main Italian car factories produce 650,000 cars a year, compared with the 600,000 that are rolled out at Fiat’s single Polish plant, which employs just 6,000 people. Last month, Fiat said it would scrap industry-wide national labour contracts to replace them with deals at the plant level setting tougher rules for working hours, sick pay and strikes — a move that labour experts say marks a turning point in Italy’s industrial relations. At the end of July, Italy's Prime Minister Enrico Letta slammed Europe for the handling of Greece's near-quarter of a trillion euro rescue package by saying that the bloc made some 'serious mistakes'. "There is no doubt that serious mistakes were made about Greece by Europe in the past few years," said Letta. "The timing was wrong. The instruments were wrong. The interventions were not made in the right way and at the right time and this worsened the crisis. "The crisis would have been different. It would have created less of a financial disaster; it would have led to fewer job losses across Europe, if Europe's attitude to Greece had been different at the beginning." 1. How does this issue relate to news regarding Greece's economic problems in EU context?