Here comes another Super Mario, but one man cannot change Italy

Europe Letter: Outsized hopes pinned on former central banker are ominous

Italy’s prime minister Mario Draghi during a debate at the senate in Rome on Wednesday before he submitted his government to a vote of confidence. Photograph: Yara Nardi/AFP via Getty

The appointment of Mario Draghi as Italy's new prime minister has lifted hopes in Brussels and in European capitals that the billions of euro going to Rome in Covid-19 recovery funds will be well spent on turning around an economy that has long been seen as a problem for the European Union.

The fate of Italy is intertwined with that of the EU. The goal of keeping Rome's borrowing costs low underpinned the bloc's economic response to the Covid-19 pandemic, with an acute awareness that if Italy sank into a debt spiral, it would be too big to bail out.

Leaders and top officials hardly conceal their delight at the appointment of the former European Central Bank president, who commands outsize respect in Brussels and is credited with saving the euro in 2012 with the three words "whatever it takes".

Officials say the room used to fall silent when Draghi weighed in in meetings of finance ministers, and a heavyweight Italian leader is a welcome development in the context of the balance of power in the EU for those who believe Paris and Berlin have become over-dominant.


Europhiles also recall the grandees from Italy – one of the EU’s most enthusiastic members in times past – who through the generations have shaped the bloc.

The extent of the hopes pinned on Draghi is almost ominous.

The Italian prime ministers who come and go are often reformist figures with big plans to fix everything who command the required majority by inspiring belief that they can overcome all the old problems through the sheer command of their stature.

There has even been a past prime minister with the same nickname as Draghi's: it was Mario Monti, a former European commissioner, who was called "Super Mario" when he was appointed to lead a technocrat government in 2011 to push through a programme of reforms.

Just as with Draghi's immediate predecessor Giuseppe Conte, the Italian political system has turned to a person with no history of electoral politics in an attempt to overcome its divisions.

Optimists point out that this time is different. We have emerged from the long era of austerity into expansionist times, and Draghi will have the chance to use more than €200 billion in EU coronavirus recovery funds to build a better future for his country.

Broad coalition

In addition to his clout he enjoys the support of a broad coalition, which, it is hoped, will make his government more resilient to the fractious nature of Italian politics in which schisms-within-schisms force frequent government resets.

But Draghi's coalition is freakish, yoking together former enemies including the right-wing populist League, the old-guard centre-left and centre-right parties, and the Five Star Movement, a party whose values could once have been described as anti-establishment but that at this point defy all definition.

Much of the joy in Brussels is down to the fact that it will be Draghi who will lead the design of a plan on how to spend the €200 billion recovery fund windfall, and not his coalition partners. The economist sang from an EU hymn sheet when he set out to parliament his ambitions for green reforms to build a modern and sustainable economy for the future.

But the possibility for change in Italy has long been hemmed in by electoral concerns and the clout of vying interest groups determined to defend their stake in the status quo. Paying pensions, to take the simplest example, is a weighty burden for one of the world’s oldest countries but raising the pension age is politically toxic.

Draghi knows it all too well, as a former top official in the Italian treasury and governor of the Bank of Italy, and he appealed to his generation’s responsibility to their children and grandchildren as he made the case to set self-interest aside this week.

“It would be a mistake to protect all economic activities equally. Some will have to change, even radically,” he said. “The choice of which activities to protect and which to keep is the difficult task that economic policy will have to face in the coming months.”

It will be Draghi who designs the spending plan for the European Commission’s approval, in the narrow window he has to rule before Italian elections due by June 2023. In Italy, and throughout the EU, results will depend on how the plans are enacted on the ground.

Italy has no problem making legislation: it’s a truism among civil servants that their office drawers creak with tomes of sometimes-overlapping reforms. Italy’s eternal problem has been their implementation.

Ultimately one man cannot change Italy: the country itself has to do that.