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Home , Italia Viva, Mario Draghi, Matteo Salvini, Possible (Italy)

IAI COMMENTARIES 21 | 07 - FEBRUARY 2021 ISSN 2532-6570 © 2021 IAI 1 of is an impeccable choice (ECB)andGovernor of the The former President of theEuropean standing andcredibility. have weakened ’s international wing , developments that successive waves of left andright- crises amidst anaemic growth and have led torepeated governmental particular. Taken ,thesetrends general and traditional parties in disillusionment towards politics in rising debtandmounting popular years of public sector mismanagement, health crises,furtherexacerbated by overlapping political, economic and country ison thebrink due to Draghi isgood newsfor Italy. The ambitious reform planindecades. seeks toimplement thecountry’s most will facedaunting challenges ashe prime minister, the incoming premier the appointment of as Beyond themediafrenzysurrounding link: article wasoriginally drafted for Política Exterior and published online at thefollowing and Editorial Director of theIAICommentaries series. Aslightly longer version of this Internazionali (IAI), Senior Fellow within IAI’s Mediterranean and Middle Eastprogramme Andrea DessìisHead of theItalian Foreign Policy programme at theIstituto Affari by Andrea Dessì New Government Challenges On theBrink: Mario Draghi andItaly’s https://www.politicaexterior.com/?p=298209. and trust that is unmatched in the a veneer of international expertise as primeminister.His careeremanates Clearly, almost noone wanted tosay premier andhis“emergency cabinet”. unanimous backingtotheincoming fallen backinline,providing almost over justabout everything, have now weeks beforehand wereat loggerheads reputation that political parties, which be thebestpick for thejob.Such ishis acknowledging that Draghi may well cent approval ratings in Italy, with many “Super Mario” ispolling at over 60per pandemic. due to the unprecedented costs of the heights (about 160percent of GDP) is expectedtoskyrocket toeven greater largest economy – whose public debt concern at acountry – ’s third- and investors who are looking with traditional allies, aswell asmarkets a source of reassurancefor Italy’s Most importantly, Draghi represents recent political history of thecountry. 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 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 , 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 , 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 ’. 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 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 (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 , 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 ( – 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- 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 , had little other choice having saved the euro during the but to pick Draghi, a technocrat, to lead sovereign debt crisis thanks to the ECB’s a new government, having excluded programme of new elections due to the pandemic and (in itself a highly political decision), the impending need to submit Italy’s has already demonstrated a certain investment agenda for the EU Recovery pennant for political manoeuvring. His Plan. experience with tough negotiations in the EU (and internationally) during The next general election is scheduled his time at the ECB will no doubt come ISSN 2532-6570 for 2023 but widely expected to be held in handy as he seeks to navigate the sooner, most likely in 2022, when the minefield of Italian politics, as will present mandate of President Mattarella his knowledge of Italian finances and will expire. Given the importance of structural challenges. this post for Italy’s delicate - institutional stability, many expect While at first many expected the Draghi – who is also earmarked as designated prime minister to announce a successor to President a caretaker government composed Mattarella – to stay in power until of experts, Draghi later unveiled a this issue is resolved. This means his mostly political cabinet. Composed government is expected to last for about of 23 ministers, 15 come from the 12 to 14 months, again confirming the major political parties – many with above trend of governmental instability previous experiences in government that has characterised Italian politics since 2011 and nine ministers who since the end of the Second World War. served under the previous Conte Bis cabinet – while the remaining eight are During this time, the incoming technocrats. Draghi clearly appointed Draghi cabinet faces mammoth trusted technocrats to oversee the most task of expanding Italy’s COVID-19 sensitive dossiers linked to the EU vaccination programme, drafting Recovery Plan, and it is within these Italy’s formal request for EU Recovery ministries that real political power and funds and promoting further reforms influence will be concentrated. to the educational, health and public administration sectors. Setting While the drafting and submission guidelines for an efficient ecological of Italy’s reform programme is transition, advancing digitalisation likely to proceed smoothly, it is the and more general efforts to promote implementation phase that poses the macroeconomic stability in a country most challenges. This will rest on the IAI COMMENTARIES 21 | 07 - FEBRUARY 2021 21 | 07 - FEBRUARY IAI COMMENTARIES

4 On the Brink: Mario Draghi and Italy’s New Government Challenges

efficiency of the Italian bureaucracy While Italian foreign policy tends and the often-difficult relationships to be characterised by trends of between the central government and continuity, being effectively shielded regional authorities. While Draghi will from the repeated governmental crises no doubt succeed in injecting a dose of and solidly anchored within Italy’s expertise in overseeing Italy’s delicate traditional European, transatlantic transition out of the COVID-19 crisis and Mediterranean dimensions, the and managing relations with Europe, country’s recent experiences with

© 2021 IAI he and his team of trusted technocrats right- and left-wing populism had will have difficulty in confronting rattled allies and diminished Italian Italy’s dysfunctional politics, negotiating power. In this respect, bureaucratic inefficiency and general Draghi serves as a powerful “reset”, reform immobilism, once the time for formalising what had already been a implementation comes. gradual trend of realignment towards the EU undertaken by the Conte Bis The road ahead cabinet.2

ISSN 2532-6570 Given the extent of the challenges, Most importantly, Draghi serves the managing expectations will be purpose of raising the political bar important. In this respect, the Draghi in Italy. His government is forcing cabinet should be understood as a politicians and parties to come to transition government with clearly terms with age old challenges that defined objectives and a relatively have plagued Italian politics for short lifespan. Notwithstanding these decades, confronting them with their challenges, one should not lose sight of responsibilities but simultaneously a number of important developments handing them a chance for redemption that have already materialised in by taking part in the reform drive. the short time span since Draghi’s appointment. In this, Draghi has succeeded in sidelining the most uncompromising, Internationally, the new government nationalistic and populist voices in the has succeeded in raising Italy’s profile Italian political setting. His “emergency and credibility, particularly in the government” has effectively divided EU, indispensable if Italy is to make the centre-right coalition, leaving the its voice heard on key decisions and far-right FdI out of government and protect its economy from speculative forcing Matteo Salvini’s League party attacks. Draghi’s statements on the to shed its anti-European orientation, “irreversibility of the euro”, on the moving closer to ’s fallacy of nationalism’s attachment to in a globalised world 2 For an analysis of Italian foreign policy during and his reiterated commitment to the the Conte Bis cabinet see, Ferdinando Nelli transatlantic relationship are clearly Feroci and Andrea Dessì (eds), Il governo Conte aimed at reassuring Italian partners. bis, la pandemia e la crisi del multilateralismo. Rapporto sulla politica estera italiana. Edizione 2020, Rome, IAI, 2020, https://www.iai.it/en/ node/12687. IAI COMMENTARIES 21 | 07 - FEBRUARY 2021 21 | 07 - FEBRUARY IAI COMMENTARIES

5 On the Brink: Mario Draghi and Italy’s New Government Challenges

Go Italy party ( – FI). In so sight of ordinary citizens, families and doing, the League is moving to re- workers – particularly the youth, which discover its original entrepreneurial are facing 30 per cent unemployment and industrial roots as the “Northern rates in the country – when delineating League” () centred in Italy’s his agenda of reforms. Investments will northern regions, thereby moving away necessarily focus on large companies from Salvini’s efforts to re-brand the and Italy’s industrial base, but finding party into a nationalist movement kept the correct balance between protecting

© 2021 IAI together by virulent anti-EU and anti- Italy’s large productive centres and migrant sentiments and a dangerous making sure that the galaxy of small fascination with strong men such as and medium enterprises that form the Russian president . backbone of the economy are not left behind will be crucial for the success The new government has also led to of Draghi’s reform agenda (as well as an implosion of the populist M5S, the his chances to succeed Mattarella as largest party in parliament, forcing President). a reckoning within the leadership ISSN 2532-6570 and a split within the party. Forty A carefully planned communication parliamentarians defied orders and strategy will be indispensable, not only voted against the Draghi government, to reassure the electorate but also to being subsequently expelled from the ensure that members of the governing Movement’s parliamentary group. coalition are not tempted to jump boat The remaining M5S parliamentarians and side with the opposition when times will likely continue the party’s get tough and the next election nears. metamorphosis away from its populist Political parties who have joined the and anti-establishment roots and closer coalition must be reminded – repeatedly to the traditional centre-left in Italian and in public – of their responsibilities politics, also through a re-invigorated and commitment. These cannot be left parliamentary alliance with the PD and to their own devises but rather should other centre and left-leaning parties. be “boxed in” by the government through programmatic statements and The opposition, meanwhile, will be clear reform or investment timetables defined by two blocks, a far-right block that create buy-in and accountability led by FdI and a yet-to be defined for citizens and political parties alike. parliamentary alliance of ex-M5S Only in this way can Draghi protect members now in search for a new his government coalition and agenda political home. Healthy for the sake of reforms, while simultaneously of parliamentary democracy, this bringing politics (and accountability) opposition will work to garner political closer to ordinary citizens, thereby capital by playing on the fears and mitigating the possibility that Italy economic hardship faced by many again experience a wave of populism Italians. and anti-establishment politics in Draghi’s wake. It is for this reason that Draghi and Italy’s political parties must not lose 23 February 2021 IAI COMMENTARIES 21 | 07 - FEBRUARY 2021 21 | 07 - FEBRUARY IAI COMMENTARIES

6 On the Brink: Mario Draghi and Italy’s New Government Challenges

Istituto Affari Internazionali (IAI) The Istituto Affari Internazionali (IAI) is a private, independent non-profit think tank, founded in 1965 on the initiative of Altiero Spinelli. IAI seeks to promote awareness of international politics and to contribute to the advancement of European integration and multilateral cooperation. Its focus embraces topics of strategic relevance such as European integration, security and defence, international economics and global governance, energy, climate and Italian foreign policy; as well as the dynamics of cooperation and conflict in key geographical regions such as the Mediterranean and , Asia, Eurasia, Africa and © 2021 IAI the Americas. IAI publishes an English-language quarterly (The International Spectator), an online webzine (Affarinternazionali), three book series (Global Politics and Security, Quaderni IAI and IAI Research Studies) and some papers’ series related to IAI research projects (Documenti IAI, IAI Papers, etc.).

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