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On the Brink: Mario Draghi and Italy’s
© 2021 IAI
New Government Challenges
by Andrea Dessì
ISSN 2532-6570
Beyond the media frenzy surrounding as prime minister. His career emanates
the appointment of Mario Draghi as a veneer of international expertise
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
IAI COMMENTARIES 21 | 07 - FEBRUARY 2021
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
article was originally drafted for Política Exterior and published online at the following
link: https://www.politicaexterior.com/?p=298209.
1On 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
© 2021 IAI
country in the EU’s Recovery Plan. – if not decades – focused on similar
priorities. Whether it be a reform of
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
ISSN 2532-6570
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
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,
IAI COMMENTARIES 21 | 07 - FEBRUARY 2021
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
ministers and 30 different governments,
Italy’s never-ending cycle of crises
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 /2 0 2 10 1 2 7/why- d o -it aly- g o v e r n m e nt s-
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.
2On 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’.
© 2021 IAI
minister or calling fresh elections.
This trend periodically leads to the The first Conte government saw the
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
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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
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
IAI COMMENTARIES 21 | 07 - FEBRUARY 2021
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,
3On 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
© 2021 IAI
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
Sergio Mattarella, 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 quantitative easing
new elections due to the pandemic and (in itself a highly political decision),
ISSN 2532-6570
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
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 politico-
institutional stability, many expect While at first many expected the
Draghi – who is also earmarked as designated prime minister to announce
a possible 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
IAI COMMENTARIES 21 | 07 - FEBRUARY 2021
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
4On 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
© 2021 IAI
transition out of the COVID-19 crisis and Mediterranean dimensions, the
and managing relations with Europe, country’s recent experiences with
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”,
ISSN 2532-6570
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
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
IAI COMMENTARIES 21 | 07 - FEBRUARY 2021
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 Silvio Berlusconi’s
fallacy of nationalism’s attachment
to sovereignty 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.
5On the Brink: Mario Draghi and Italy’s New Government Challenges
Go Italy party (Forza Italia – 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” (Lega Nord) centred in Italy’s his agenda of reforms. Investments will
northern regions, thereby moving away necessarily focus on large companies
© 2021 IAI
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
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 Vladimir Putin. backbone of the economy are not left
ISSN 2532-6570
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
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
IAI COMMENTARIES 21 | 07 - FEBRUARY 2021
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
6On 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
© 2021 IAI
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 Middle East, Asia, Eurasia, Africa and
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.).
ISSN 2532-6570
Via dei Montecatini, 17
I-00186 Rome, Italy
iai@iai.it
www.iai.it
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