Can Mario Draghi prove the saviour of Italy?

Former ECB chief has his work cut out after accepting mandate to form a new government and tackle Covid crisis

Mario Draghi has saviour credentials. Newspapers called him 'the saviour of the euro'. AFP

For generations Italians have taken comfort from a saying that the political situation was 'critical but not serious'.

With the latest political crisis, the parlous state of the country can no longer be laughed away.

After the patience of 79 year old president Sergio Mattarella snapped, Mario Draghi, the former head of the European Central Bank accepted a mandate on Wednesday to form a new government. The prime minister's designation was asked to tackle head on “the serious health, social, economic and financial emergencies” facing Italy.

Former prime minister Matteo Renzi’s decision to withdraw support was the last straw for the centre-left government led by Giuseppe Conte.

Undoubtedly, Mr Draghi has saviour credentials as Mr Conte's successor. Newspapers called him “the saviour of the euro” nearly a decade ago and his sway with moderate voters is high.

The orphan teenager, brilliant in mathematics, who studied at Sapienza University of Rome and has a PhD from the MIT, has flourished into one Italy’s most respected economists.

“Whatever it takes”, he said in 2012, implying that the ECB would do anything to preserve the euro: an expression so legendary in Italy that it appears written on the walls.

Though Covid-19 has killed almost 90,000 people in the country and caused enormous difficulties for the national health system, a remnant of what was once called the ‘dolce vita’ is still evident.

The historic city centres are quite crowded, many middle-class people cannot wait to get back on the ski slopes and youngsters have their aperitifs in the late afternoons. Valentine’s Day is approaching and supermarkets are full of big, heart-shaped boxes of chocolates made in Italy.

For a Draghi government to come into being, there must be a confidence vote in parliament. Centrist parties hold less than half the seats, while populists on the left, the Five Star Movement and the right, Lega and Fratelli d’Italia, can cancel each other out.

Reputation is Mr Draghi's key card. “Draghi is an important personality, he can really help Italy at this very difficult time. This is why I hope that responsibility will prevail in Parliament,” said Marcello Pera, former president of the Senate.

A left-wing member of the parliament said that many politicians did not want fresh elections. “In the end, many parliamentarians will vote for Draghi. The alternative is a new election, and many are terrified of not being re-elected,” the representative said.

If endorsed, Mr Draghi’s main challenge will be to defeat Covid-19. So far, Italy has been one of the European countries with relatively high vaccination rates and is looking to offer inoculation to most people by September. However, more co-ordination is desperately needed between national and regional health authorities.

Mr Draghi will also have to boost the economy. Entire sectors, such as restaurants, chain stores and hotels are in dire straits.
The crucial issue will be to make the best use of the €209 billion ($251.31bn) made available to Italy through Next Generation EU, a European recovery instrument to help repair the immediate damage done by Covid-19. "Italy can only hope to recover if it uses this money well. You need capable people, Draghi is the most eminent man Italy can count on, we have no other possibility" said Gianfranco Pasquino, a professor of political science at Johns Hopkins University SAIS Europe in Bologna.
Social tensions are also a big challenge. Mr Conte had managed to keep the situation under control thanks to subsidies and some smart measures, but the increase in youth violence, domestic violence, queues at soup kitchens and homeless people freezing to death in the streets tell us that many Italians are running out of strength, especially in the poorer south.
"This crisis shows the disconnection between a political system that has so far only produced rubble. It also shows the needs of the country and its most enlightened elite," Marco Follini, a former deputy prime minister said.

Mr Draghi is the best that the Italian elite can express, and since he has been pointed out as the new prime minister, something has already improved: the spread between Italian and German government bonds has fallen, and the Milan stock exchange is rising. But this first small miracle will certainly not be enough.

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