Is Mario Draghi the man to handle this eruption in Italian politics?
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Italy's new leader enters office with plenty of experience and esteem. But he will need even more than that to tackle the monumental task facing him, says Esmé O'Keeffe.
Last Wednesday Mario Draghi became the latest Italian to receive a summons to the Quirinale and to trek up the highest hill in Rome to the palace - once home to popes and kings and now the official residence of the president - to be asked to form a new government.
Italy’s political system is famously fractious and fragmented. Since the end of the Second World War, the country has had 66 governments, with each lasting little more than a year on average. The beginning of the end for the last one came on January 13, when Matteo Renzi pulled his minor Italia Viva party out of the centre-left coalition headed by Giuseppe Conte.
Renzi - a former prime minister himself - had fallen out with Conte over plans to spend more than 200 billion euros in EU funds and loans to help the economy recover from the pandemic. When Conte failed to win an outright majority in a vote of no confidence in the senate, it became apparent that Renzi – or Il Rottamatore ('the Wrecker') as he is now known – had brought the government and the prime minister down with him after only 16 months.
With hostile parties refusing to work with each other, president Sergio Mattarella had little choice but to call on Draghi and ask him to take charge. A former head of the European Central Bank, Draghi is best known internationally for his promise, at the height of the eurozone crisis, to do “whatever it takes” to save the euro. His nickname 'Super Mario' is testament to the fact that many believe he pulled this off, pretty much single-handedly.
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Once again, he finds himself the focus of huge expectations, as he faces the task of trying navigate his country out of the political, financial and public health mess in which it has become ensnared. Whether he will be able to pull off the same feat of salvation is unclear.
Draghi is a highly-respected economist and is politically neutral. He will form a 'technocratic' government - a non-partisan administration staffed with experts - usually economists - rather than politicians. These have been a feature of Italian politics during times of crisis, usually as a last resort. Mario Monti, another economist, let a technocratic government from 2011-2013, as the country went through a period of austerity after the debt crisis, and Carlo Ciampi, a banker, was prime minister through the mani pulite, 'clean hands', scandal, in 1993-4.
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But technocratic administrations bring with them inherent weaknesses. Even in strong governments, the office of prime minister in Italy is far weaker than it is in, say, Britain. For a technocrat, it can be an impotent role. With no electoral base or networks of political support to rely on, technocrat leaders can struggle to pass anything through parliament. They also tend to lack the vision, strategy and mandate to find long-term solutions.
With negative economic growth and public debt soaring towards 158.5% of GDP, the economy is fragile. While Italy is set to receive a 750bn euro post-pandemic recovery package from the EU, there is no agreement on how to spend it and no clear plan for necessary reforms.
As the 2023 elections approach and politicians scramble to curry favour through policies that yield short-term political gains, it will become even harder for Draghi to apply the sustainable, long-term vision that Italy so badly needs.
Does he have what it takes to steer the ship through these troubled waters? As Gianfranco Pasquino, professor emeritus of political science at the University of Bologna, observes: “Draghi makes a long-awaited eruption into Italian politics at a time of subterranean as well as visible conflicts. His authoritativeness is highly recognised. His political knowledge is a totally unknown entity (he will have to rely substantially on the president of the Republic). If he succeeds in creating a working governmental coalition, he will probably enjoy a honeymoon, but soon he will have to show his political capabilities.”
Draghi does have some strong credentials, plus that important esteem in which he is held. Born in Rome in 1947, he attended a renowned Jesuit school, studied economics under the notable Keynesian economist Federico Caffè at La Sapienza University, and went on to obtain a PhD from the Massachusetts Institute of Technology in 1976.
The third chapter of his thesis, supervised by the Nobel Prize-winning economist Franco Modigliani, dealt with the “trade-off between short-run stabilisation policies and long-run plans” – a theme that Draghi will have to confront in his new role as prime minister.
As governor of the Bank of Italy from 2005-2011, according to the former BBC Rome correspondent David Willey, Draghi “was already one of that rare breed of highly qualified senior civil servants who kept things running while under-qualified politicians simply squabbled and jousted for power”.
During the eight years that Draghi then spent at the helm of the European Central Bank, against all the odds he succeeded in steadying the markets, allaying Germany’s fears about economic stability, and staving off the collapse of the euro.
He was also one of the first to grasp the full scale of the impact of coronavirus. As early as March 25, 2020, in an article in the Financial Times Draghi wrote that “the coronavirus pandemic is a human tragedy of potentially biblical proportions”.
With greater foresight than most, he warned that “a deep recession is inevitable. The challenge we face now is how to act with sufficient strength and speed to prevent the recession from morphing into a prolonged depression”.
Draghi’s handing of the eurozone crisis is proof of his crisis management skills, but he is also courageous, pragmatic and flexible; he is fond of quoting the (perhaps apocryphal) John Maynard Keynes phrase “when the facts change, I change my mind. What do you do, sir?”.
Ever the diplomat, Draghi is reluctant to get drawn into Italy’s Machiavellian political partisanship and instead is discreet about his own political convictions. Unlike his predecessor Giuseppe Conte – the law professor who was entirely unknown until the Lega and Movimento Cinque Stelle plucked him out of obscurity to lead a shaky coalition in 2018 – Draghi is high-profile and commands respect across the board.
Rarely has an incoming prime minister been welcomed with such reverence. “I am almost certain that Draghi will show the best of his personality: seriousness, openness to entertain different positions and to accept good suggestions, reserved and calm,” says Gianfranco Pasquino. We can also expect an increase in “good debt”; in a speech in August 2020, Draghi set out his support for sustainable, “productive” debt used for investments in human capital, infrastructure and research.
Relations with Europe will also be a central theme of his premiership. While the EU is currently dominated by France and Germany, Draghi may well carry sufficient clout to step into the UK’s empty shoes and even out the balance of power. After all, there is likely to be a significant realignment in European politics, with Angela Merkel departing the scene this year, and Emmanuel Macron finding his attention increasingly turning towards next year's presidential elections.
But Draghi’s close ties with Europe will be a double-edged sword. The EU is an increasingly problematic subject in Italy; ever since Matteo Salvini’s far-right Lega party won a share in the ruling coalition in 2018, anti-EU sentiment has been on the rise. If Draghi is perceived to have failed, it will open the door for Salvini and the far-right, empower the ‘Italexit’ movement, and spell disaster for Europe.
The stakes are high and all hopes are pinned on Draghi to leave Italy – and Europe – in a better place than he found it. If he succeeds as prime minister, there is a good chance he will be elected as president of the Republic. Then, it will be his turn to summon the next generation of Italians up the hill to the Quirinale.
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