Mario Draghi Is Putting Pressure on His Coalition Partners After Missing Out on the Italian Presidency

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(Bloomberg) — When Mario Draghi convened his cabinet two days after his failed bid for president, he shook hands with each minister and congratulated them for Italy’s economic rebound last year. Then he gave them 48 hours to submit their plans for the next phase of economic rebuilding, according to people briefed on the meeting.

As he looks to refocus his administration after the rare setback of his presidential rejection, Draghi is stepping up the pace of his economic reform programs. He isn’t ready to indulge the objections of his coalition partners. 

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The former European Central Bank chief is determined to re-establish his authority and pull his fractious coalition into line, the people said. He’s also wary of taking on too much extra debt at a time when the ECB is shifting toward tightening monetary policy, pushing up the cost of borrowing for the Italian state, they added. 

Since the presidential vote, he’s pushed back on calls by parties to expand the budget deficit to help tackle spiraling energy prices and brushed off requests to duck contentious issues, like revamping an inefficient judicial system. Draghi has more than 50 separate measures to deliver by the end of June to trigger the release of the next tranche of aid money from the European Union’s giant recovery fund. 

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The parties that form Draghi’s coalition had treated his thinly-veiled bid to become head of state as an opportunity to extract concessions from the prime minister and stopped bending to his will. With the presidency off the table, and certain party leaders weakened by the shambolic voting process, Draghi’s leverage has increased. 

Read more: Chastened Draghi Buys Time to Fix Italy After President Miss 

But he’s still going to face opposition. The six parties in his coalition are starting to look toward a general election, due by next spring. They have divergent views on what the reforms should look like and are reluctant to be steamrollered by the prime minister.

“It’s not in the DNA of a rational politician to undertake difficult reforms in an election year,” said Veronica de Romanis, a professor at Luiss university in Rome. “They are too unpopular.”

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The government was defeated four times this week over minor amendments to legislation, prompting Draghi to call party representatives into his office on Thursday. He complained that parliament is too slow to push through legislation and urged them to get behind the government’s program, according to officials briefed on the meeting. 

Read more: Draghi Presided Over Strongest Italy Growth in Four Decades

As he plows ahead with his program, Draghi is also making more an effort to get out of the capital and show the voters what he’s up to.

In early February, he spent a day in Genoa to kick off a nationwide campaign that explains government spending plans. Later in the month, he toured Gran Sasso National Laboratory beneath the Apennine mountains, the world’s largest underground research center, and met with Giorgio Parisi, winner of last year’s Nobel prize for physics.

All this activity has sparked rumors that the unelected prime minister could be interested in seeking his own mandate from voters when the current term ends.

But in a recent press conference, Draghi laughed off the idea.

“I am being put forward for several roles,” said the 74-year-old veteran, whose resume includes a Ph.D. from MIT and a stint at Goldman Sachs before he ran the ECB. “But I am more than capable of getting myself a job.”

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