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Mario Draghi and Italy's New Government Challenges

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Mario Draghi and Italy's New Government Challenges On the Brink: Mario Draghi and Italy’s New Government Challenges © 2021 IAI by Andrea Dessì Beyond the media frenzy surrounding as prime minister. His career emanates the appointment of Mario Draghi as a veneer of international expertise ISSN 2532-6570 prime minister, the incoming premier and trust that is unmatched in the will face daunting challenges as he recent political history of the country. seeks to implement the country’s most Most importantly, Draghi represents ambitious reform plan in decades. a source of reassurance for Italy’s traditional allies, as well as markets Draghi is good news for Italy. The and investors who are looking with country is on the brink due to concern at a country – Europe’s third- overlapping political, economic and largest economy – whose public debt health crises, further exacerbated by is expected to skyrocket to even greater years of public sector mismanagement, heights (about 160 per cent of GDP) rising debt and mounting popular due to the unprecedented costs of the disillusionment towards politics in pandemic. general and traditional parties in particular. Taken together, these trends “Super Mario” is polling at over 60 per have led to repeated governmental cent approval ratings in Italy, with many crises amidst anaemic growth and acknowledging that Draghi may well successive waves of left and right- be the best pick for the job. Such is his wing populism, developments that reputation that political parties, which have weakened Rome’s international weeks beforehand were at loggerheads standing and credibility. over just about everything, have now fallen back in line, providing almost The former President of the European unanimous backing to the incoming Central Bank (ECB) and Governor of the premier and his “emergency cabinet”. Bank of Italy is an impeccable choice Clearly, almost no one wanted to say Andrea Dessì is Head of the Italian Foreign Policy programme at the Istituto Affari Internazionali (IAI), Senior Fellow within IAI’s Mediterranean and Middle East programme and Editorial Director of the IAI Commentaries series. A slightly longer version of this IAI COMMENTARIES 21 | 07 - FEBRUARY 2021 21 | 07 - FEBRUARY IAI COMMENTARIES article was originally drafted for Política Exterior and published online at the following link: https://www.politicaexterior.com/?p=298209. 1 On the Brink: Mario Draghi and Italy’s New Government Challenges “no” to Draghi, particularly given the executives lasting on average for high stakes involved as Italy continues 14 months, repeated governmental to battle the COVID-19 crisis and changes have inevitably impacted urgently needs develop a credible plan the country’s reform trajectory. It of investments and reforms to access is no coincidence that successive the over 200 billion earmarked for the government agendas have for years country in the EU’s Recovery Plan. – if not decades – focused on similar priorities. Whether it be a reform of © 2021 IAI How long will Draghi’s chilling effect Italy’s electoral law, improved tax- on political infighting last is an open evasion measures, a modernisation question. Political parties – with of the education and justice systems, the notable exception of the far- increased investments in Italy’s right Brothers of Italy party (Fratelli disadvantaged South or improved d’Italia – FdI) and a sizable number of efficiency in the public administration, parliamentarians from the populist Five successive governments have Star Movement (Movimento 5 Stelle – promised widespread reforms only to M5S) – have enthusiastically backed see their ambition watered-down by ISSN 2532-6570 the new executive, in turn securing bureaucratic inertia or halted altogether political representation within the by political infighting. 23-member cabinet. Yet, their promise to put national interests above party This is because the country’s notoriously politics is hard to reconcile with the fragmented political establishment recent – and not too recent – history of can rarely agree on a clear political Italian politics. agenda, let alone long-term reform plans or stable political alliances to While no one is debating Draghi’s carry them forth. The result is a general credentials, the key question revolves immobilism that pervades the highest around the governability and echelons of politics in the country, prospective longevity of Italy’s new preventing genuine debates on content government. These are elements that and policy, or an appropriate urgency will define Draghi’s ability to actually to discuss long-overdue structural oversee the implementation – and reforms that everyone acknowledges not only the drafting, negotiation and are vital for Italy’s sustainability. approval – of Italy’s Recovery Plan and Indeed, no sooner is a new executive ambitious reform agenda. sworn in that everyone knows, or is Italy’s never-ending cycle of crises ministers and 30 different governments, compared to three Chancellors in Germany, five Presidents in France and five prime Italy has had 67 governments and 30 ministers in Spain and Sweden. See, “Why do prime ministers over past 75 years Italy’s governments collapse so often?”, in The Local, 27 January 2021, https://www.thelocal. and this alone speaks volumes as to it/20210127/why-do-italy-governments- the country’s reputation for political collapse-so-often; “Why does Italy go through turmoil and ungovernability.1 With so many governments?”, in The Economist, 31 January 2021, https://www.economist.com/ the-economist-explains/2021/01/31/why-does- 1 Over the past 30 years Italy has had 19 prime italy-go-through-so-many-governments. IAI COMMENTARIES 21 | 07 - FEBRUARY 2021 21 | 07 - FEBRUARY IAI COMMENTARIES 2 On the Brink: Mario Draghi and Italy’s New Government Challenges betting against, its likely duration. replaces Giuseppe Conte, who had the peculiar task of leading two very The task of breaking the political different governing coalitions in Italy impasse has increasingly fallen on between 2018 and 2021, but had grown Italy’s President of the Republic, who to enjoy widespread sympathies of is charged with picking a new prime many Italians’. minister or calling fresh elections. This trend periodically leads to the The first Conte government saw the © 2021 IAI appointment of a political outsider populist M5S, which secured the most to overcome deadlock, providing a seats in Italy’s last general election and convenient cover for political parties picked Conte as their prime minister to overturn electoral promises, even though the former premier moderate their discourse and realign was never active in the party, ally behind a new technocratic or national with the far-right and anti-migrant unity government. In the short-term, League party lead by Matteo Salvini everyone gains from this outcome. (June 2018–August 2019). The second Political parties can effectively skirt government, the so-called Conte Bis ISSN 2532-6570 their responsibilities for the present cabinet, was instead formed by the M5S crisis, avoid being tainted by the with a number of political forces from tough reforms that will follow while the centre and centre-left, led by the simultaneously depict themselves as Democratic Party (Partito Democratico responsible actors who have backed a – PD), which governed since September national emergency cabinet in times 2019, leading the country’s pandemic of crisis. Meanwhile, the new head response and lasting until the political of government, who generally enters crisis that began in late January 2021. power with remarkably high popular support, will gradually see this support This was triggered by Matteo Renzi, dissipate as campaign rhetoric and former prime minister while still with manoeuvring return to dominate the the PD and now leader of the small prerogatives of political parties and Italy Alive (Italia viva – Iv) party. Iv leaders, thereby setting the stage for decided to pull out from the Conte the next impending crisis. And so the Bis government citing concerns over cycle continues. the management of the 209-billion- euro Recovery Plan and a host of other Draghi’s national salvation govern- issues tied to Conte’s governance style. ment Italy must provide its detailed plan to the EU Commission by the end of April This time, in February 2021, a chorus in order to begin gaining access to of relief and financial relaxation, the funds, a lifeline that is desperately accompanied the appointment of needed to relaunch its economy, and Mario Draghi as Italy’s new prime in the process upgrade its digital and minister. Draghi, who has now secured environmental infrastructure in line formal and bipartisan endorsement with EU prerogatives and the ongoing from Italy’s two houses of parliament energy transition. with a very wide margin of votes, IAI COMMENTARIES 21 | 07 - FEBRUARY 2021 21 | 07 - FEBRUARY IAI COMMENTARIES 3 On the Brink: Mario Draghi and Italy’s New Government Challenges Renzi, first triggered a government that had yet to recover from the 2008 crisis and then worked to end the financial crisis when the COVID-19 premiership of Conte, who rose to pandemic hit early last year, also figure become Italy’s first “populist” prime at the top of the new government’s minister back in 2018. As Conte failed to agenda. cobble together a stable parliamentary majority in a last-ditch attempt to stay By no means a simple “technocrat”, in power, the President of the Republic, Draghi, who is widely credited with © 2021 IAI Sergio Mattarella, had little other choice having saved the euro during the but to
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