After gaining support from parties from all political backgrounds, including Eurosceptics, former European Central Bank President Mario Draghi, 73, presented his new cabinet to Italian President Sergio Mattarella on Friday (12), who accepted it. Draghi’s oath as the 67th Italian Prime Minister since World War II will take place this Saturday.
An economist nicknamed “Super Mario” after saving the euro from the collapse of the 2011/2012 crisis, Draghi has never been a candidate for political office. Its success in attracting expressive support raises, at the same time, doubts about the duration of such a diverse government internally.
In one of the most unstable government countries in the European Union, Draghi takes the place of Giuseppe Conte, who failed to maneuver to regain a majority earlier this month. His name must be ratified by the Chamber of Deputies and the Senate, which is expected for the next Tuesday (16) and Wednesday (17). He will be the seventh prime minister in the past ten years.
One of the new prime minister’s staunchest supporters has to be the radical right-wing La Liga party, led by populist Matteio Salvini, which last year called the European Union “a den of snakes and jackals” , has already defended the exit from the euro and called Draghi an “accomplice” in the “massacre” of the Italian economy, for having acted to save the common currency.
This week, as he rejoined the former disaffection, Salvini told an Italian radio station that “right, left, eurosceptic or nationalist are just labels”. Although better known as a party of anti-EU populists, the League “has always had a moderately influential, but not always loud, faction focused on corporate interests and which is the dominant force in the north,” said Luiggi Scazzieri , a researcher from the Center for European Reform, analyzing the challenges of Draghi.
According to the analyst, the moderates pressured Salvini to support the new government, persuading him that this would allow him to decide how to spend the billions of euros that Italy will receive from the European post-pandemic stimulus fund. Not by chance, he declared himself on the radio as “a very pragmatic person”. “I’d rather be in the room where we decide how the money will be spent, good or bad.”
In the room with the right wing of the League can also be found the center-left, of the Democratic Party, and the right-wing association Força Itália, of ex-Prime Minister Silvio Berlusconi.
The final seal for Draghi to become the new Prime Minister of Italy – the 6th in ten years, came this Thursday from the 5 Star Movement (M5E, an acronym which defines itself as anti-system). The largest Italian party (with 216 of the 630 deputies), it contributed with a secure majority in Parliament, but it was divided. In an internal vote, 59.3% of its members supported Draghi, on condition that he creates a “super ministry for ecological transition”.
Parties that have already expressed support for Draghi would guarantee him 555 MPs, 88% of the total. To maintain control of such a diverse coalition, Draghi will be able to count on strong popularity – recent polls give him over 60% approval, making him the most popular public figure in the country.
In addition, the urgency of economic recovery is expected to dominate the agenda in the coming years. The third largest economy in the EU, Italy is expected to experience an 8.8% drop in GDP in 2201, according to European Commission forecasts released on Thursday (11).
One of the first measures will be to negotiate with the European Union its economic stimulus proposal financed by a maximum of 209 billion euros (1.3 billion reais) in retrocessions and bulk loans. The fund’s resources are expected for the second semester, but must be examined by the European Commission (executive power of the bloc).
Members of the European Union, especially northern European countries, have criticized what they see as Italy’s lack of austerity in their public accounts, but Draghi has experience on both sides of the world. counter in his favor – as a respected and trusted bloc banker and as an academic who has been studying the Italian situation for years.
It must try to tackle the structural bottlenecks – in regulatory bureaucracy, administration and legal certainty, and in the tax system – that have strangled the Italian economy and hampered its access to EU funds. Draghi is counting, at least for now, on the goodwill of investors: the news that he is trying to form a new government has triggered the stock market and lowered the cost of loans.
Despite Draghi’s prestige, the challenges are not small. Vaccination and public incentives are expected to increase from the second year, but Italy’s public debt has already reached 159% and there are signs that unemployment is likely to rise further before falling, which could weaken its popularity.
If the internal environment deteriorates a lot, the new Prime Minister risks losing some of the passengers on his boat, like the M5E or the League, which would lead to a new crisis for the government. Otherwise, Draghi could theoretically remain in power until the next election in 2023.