Draghi’s Agenda Faces Resistance From His Staunchest Ally

(Bloomberg) -- Mario Draghi’s staunchest political backers have become an unexpected thorn in the side for the Italian prime minister.

In theory, the Democratic Party’s moderate, pro-European agenda is a perfect match for Draghi and should make it the anchor of the premier’s broad but fractious coalition. In recent weeks, though, the Democrats have grown annoyed at Draghi’s perceived slights on everything from the pandemic to taxes to hiring.

Italy’s main center-left party has been pushing to extend a firing freeze that Draghi wants to curtail as a boost to companies while the premier is blocking the Democrats demands for higher taxes on the wealthiest Italians. The tensions came to a head on May 20, when Draghi held a press conference to present the government’s latest stimulus package.

Labor Minister Andrea Orlando, a democrat, ambushed the premier by announcing an extension of a firing freeze. That was something that had not been agreed beforehand, according to officials with knowledge of the move, and Draghi was forced to find a compromise after coalition allies and business leaders complained.

Just hours earlier, Democrat leader Enrico Letta had pitched a twin proposal to increase taxes on high net worth individuals and to pay a 10,000-euro ($12,000) bonus to 18-year-olds. Draghi’s reply was quick: “This is not the time to take money from people, but to give it back.”

The Democrats have been pushing for more progressive agenda within the coalition, promoting a law to make it easier for immigrant children to become Italian and another to sanction hate speech.

Draghi, on the other hand, has been focused on swiftly reopening the economy and reducing red tape that hampers investment -- something that meets the public demands of Matteo Salvini, leader of the right wing League. A spokesperson for the prime minister’s office declined to comment.

After meeting Draghi on Thursday for their third conversation since he took office, Letta said in a Twitter post that the two are “in total agreement on pushing ahead on justice, fiscal, labor reforms which are the backbone of the European Union pact.” Letta and Draghi have known each other for years and speak frankly to each other, a senior Democrat official said.

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