Italy

Whatever it takes for Italy

Following the resignation of Prime Minister Giuseppe Conte, Italy is expecting a government of national unity. This government is set up to lead the country out of the current crisis until the next regular elections in 2023. Since it went public that President Sergio Mattarella had entrusted Mario Draghi with the formation of a new government, several "Draghi effects" have become apparent: the spread has settled at 90 with a further downward trend, and within a very short time, supporters for this new government were identified from all political directions. Expectations from home and abroad for "Super Mario" are high.

Mario Draghi is considered worldwide as one of Italy's most influential and respected personalities. This fact is also having an effect within Italy. Many parliamentarians who would otherwise be clamoring for new elections have been convinced by Mattarella and Draghi within a very short time that it would be irresponsible in the current situation to dissolve the chambers and then stagger through the crisis for just under five months with a government whose powers are limited until a new government is ready. Draghi's outcry "Unity is now not an option, but a duty." worked. Last week, following exploratory talks, almost all elected officials in both chambers of the Italian Parliament declared their support for a Draghi government across party lines, far beyond the so-called "maggioranza Ursula." As a result, the new government, which will face a vote of confidence in the Chamber of Deputies and the Senate later this week, could achieve what will probably the best approval ratings in the history of the Italian Republic.

From financial superhero to head of government

University professor Mario Draghi is a guarantee for many because of his professional networks and experience. His designation as president of the Bank of Italy in 2005 was followed by other prominent positions, including memberships of the Financial Stability Board (FSB) from 2009, as well as the Governing Council and Executive Board of the ECB or the Board of Directors of the Bank for International Settlements, before becoming chairman of the FSB. Draghi has also served as Executive Director for Italy at the World Bank and the Asian Development Bank and is a member of the Group of Thirty. Between 2011 and 2019, he led the fortunes of the European Central Bank where he also was much criticized for his low-interest-rate policies. He left behind a rescued but fragmented Eurozone. From the euro crisis, he is well remembered for his statement "Whatever it takes" to save the Union's currency. Now then, whatever is necessary for Italy, which has been shaken by the Corona crisis. Fast action is also required: By April, the new government of the financial expert must apply for EU money from the reconstruction fund. Italy would then have an estimated 200 billion euros at its disposal. A lot of money with which to set the course for a post-pandemic future. The digital transformation, but also the transition to an ecologically oriented future, form the framework for this.

The current task is to provide aid to companies in the country, also with the objective to counteract as best as possible a wave of layoffs what is currently still being held back by a layoff freeze. This all amid the ongoing pandemic and vaccination delay. One of Draghi's biggest challenges will be to keep bringing together the different political movements in this government of national unity without having to make too many concessions. In order to be able to implement his government program without major hurdles, Draghi is planning, as Corriere della Sera reported, a joint agreement between all parties involved in the government. This "governing moratorium" intends to prevent that measures adopted by the government will be rejected by the parliament. Whether such governance will work out until the next regular elections in 2023 is anything but certain. For example, ex-prime minister and head of the conservative Forza Italia, Silvio Berlusconi, emphasized that the government would "be in office as long as it is needed."    

Christian Concu is a former scholarship holder of the Friedrich-Naumann Foundation-for Freedom.