Italian Prime Minister Mario Monti said on Monday he would not cling to power if unions and politicians rejected his economic reform plans, putting pressure back on to opponents of proposals that would make it easier for companies to fire workers.
The proposals have drawn a strike call from Italy's largest union, the CGIL, aroused strong resistance in the centre-left Democratic Party, which supports Monti in parliament, and sharply dented his government's approval ratings.
Monti, appointed in November as market turmoil threatened to engulf Italy in a Greek-style debt crisis, has pledged to push through far-reaching reforms to the euro zone's third largest economy before new elections in 2013.
The objective is a lot more ambitious than just staying there. It's trying to do a good job, he told a news conference in Seoul, where he was attending a nuclear conference.
If the country, through its labour organisations and political parties, does not feel ready for what we consider a good job, we would certainly not seek to keep going just to reach a particular date, he said.
The implied threat to quit puts pressure back on to the CGIL and especially the PD, which doesn't want Monti to fall, possibly making way for a centre-right government.
The plan to weaken employment protection measures is part of a package of labour reforms that the government says is needed to free up the job market and get more young people working.
The plan is being closely watched by Italy's euro zone partners and financial markets as a test of Monti's ability to reform a stagnant economy and generate growth to reduce Italy's massive debt mountain.
Earlier the PD, which backs Monti as part of a cross-party coalition with the centre-right PDL party, pledged to change key elements of the labour reform, although it also repeated that it did not want to bring down the government.
We want to get the labour reform done but also to discuss it in parliament and correct the gaps there are in it, PD leader Pier Luigi Bersani told a meeting of party chiefs.
However, tension is growing in the ruling coalition ahead of May 6-7 city council elections that will be the first test of voter support since Monti came to office. The PDL wants to see the reforms passed as quickly as possible.
After four months of relative calm following his appointment to succeed Silvio Berlusconi's scandal-hit government, surveys suggest that the mood of consensus surrounding the start of his administration may be starting to fray.
In an ISPO opinion poll in the daily Corriere della Sera on Sunday, Monti's support fell to 44 percent from 62 percent in early March, with 54 percent now holding a negative view of his unelected government.
Two thirds of those surveyed were against the proposed reforms, which would weaken protections won by the union movement at the height of its power in the 1970s.
The CGIL has announced 16 hours of stoppages including a day-long general strike to fight the reforms, which will be debated in parliament over coming months.
The measures are part of a wider overhaul of rules that Monti says divide the job market between a privileged group of older, protected, full-time workers and a growing army of young people in insecure, temporary jobs that offer few prospects or benefits.
The changes will ease restrictions under Article 18 of the Italian labour code, allowing firms to fire workers for business reasons and do away with an automatic right to reinstatement for wrongful dismissal except in cases of proven discrimination.
Employers say the current restrictions on firing discourage firms from taking on staff because they find it hard to lay them off when business conditions get worse.
But critics say the proposals offer no real incentive for companies to offer permanent jobs.
(Writing By James Mackenzie; editing by Barry Moody)