Storm clouds are gathering over Mario Monti’s efforts to transform the Italian economy, with his approval ratings dropping, mounting protests against his reforms and a damaging row with the parties that sustain him in parliament.
Mr Monti shot out of the blocks after being appointed prime minister in November and quickly implemented tough austerity measures to fend off the debt crisis. But he now risks running into political quicksands that will slow down and weaken the much harder task of reviving a notoriously stagnant economy.
A labour reform at the centre of Mr Monti’s plan has hit heavy opposition, forcing him to abandon immediate implementation and accept a parliamentary debate that will delay the law for months and could lead to it being diluted. The reform has caused rifts in the centre-left Democratic Party, his second-biggest parliamentary backer, destabilising the alliance on which he depends.
Italy’s borrowing costs, which fell sharply after Mr Monti took power, have also begun to creep upwards, reflecting in part the increased political uncertainty.
The technocrat premier was widely criticised by both politicians and commentators in Italy yesterday for an outburst against the parties from Japan, where he was on an Asian tour intended to drum up foreign investment.
Mr Monti told reporters: “The government enjoys high support in opinion polls, the parties do not.”
This followed remarks in South Korea where he threatened to step down if the parties and trade unions didn’t like the job his administration was doing.