Italy's Monti runs into trouble over labour reform

Prime Minister Mario Monti's drive to force through labour reform in Italy ran into political trouble on Thursday, raising the risk that the coalition supporting him in parliament could splinter or the measures be weakened.

The leadership of the centre-left Democratic Party (PD), which supports Monti, had initially seemed ready to accept the reform despite trenchant opposition from its close ally the leftwing CGIL union, which has called a day-long protest strike.

But overnight, apparently under pressure from the left of the party, PD leader Pier Luigi Bersani expressed anger over the technocrat premier's tactics in brushing aside opposition to the reforms.

"Pay attention. Monti cannot tell the PD to take it or leave it. You cannot do this," Bersani said on a state television talk show on Wednesday night.

The PD is the second biggest group in a grand coalition supporting Monti and essential if he is to get laws through parliament.

The reforms to employment protection laws dating back to the 1970s are central to Monti's drive to transform the euro zone's third-biggest economy and end a decade of stagnant growth.

They are also at the heart of a broader effort to restore confidence in the euro zone and are being closely watched on financial markets.

Raffaele Bonanni, head of the moderate CISL trade union which has been supportive of Monti's reform drive, said before going into new talks on Thursday that they were pushing to modify a proposal easing firing restrictions.

But Labour Minister Elsa Fornero told reporters after the meeting that Bonanni had not even asked for changes.

"There has been no climbdown, this must be clear, the government has no intention of taking steps backwards."

On Friday the cabinet will decide whether to present the reform to parliament as an emergency decree or a normal bill needing much longer for approval. Fornero stressed the need for urgency, calling on parliament to approve it quickly or have the courage to "send us home", meaning bring down the government.

"I hope and believe that the PD will be convinced of the merits of what we are proposing," she said.

Any changes are strongly resisted both by employers and the centre-right People of Freedom party (PDL) of former premier Silvio Berlusconi.

Emma Marcegaglia, outgoing president of employers' organisation Confindustria, said softening of the reform would make it useless. "Any more weakening ... would be unacceptable," she said. "It would be better not to do it at all."

PDL secretary Angelino Alfano responded to Bersani on Thursday by saying that his party, which is the biggest group supporting Monti, would not allow the PD to weaken the law.

He told a radio programme that his centre-right party would insist on their own changes if the PD tried to modify the reforms drawn up by Monti's technocrat government.