This paper examines the recent White Book of the Italian Ministry of Labour, and its proposals for reforming the Italian labour market. A careful scrutiny of this document’s arguments shows that the White Book’s "reformism" is not well grounded. Using both empirical and theoretical arguments, this article shows: (i) that substantial wage moderation, together with widening wage differentials between Northern and Southern Italy, do not lend support to the White Paper’s arguments underlying its proposal that the contractual mechanism and the incomes policy introduced in 1993 should be abandoned; (ii) that the proposed reforms in the norms concerning firing costs and contractal typologies may provide the wrong incentives to firms, by encouraging them to substitute short term, fragile employment relations for long term, robust ones, thus contributing to lower human capital investment and deteriorating economic performance.