How does Mario Draghi want to spend his 2022?

This is the €200 billion question surrounding Italian politics. Compared with that, this week's city election results are mere entertainment

On the face of it, something exciting has been happening in Italian politics. On Sunday October 3rd and Monday October 4th, Italian voters went to the polls to elect mayors of six major cities, a new president for the region of Calabria, and mayors and councils for a lot of smaller towns. Turnout by voters hit a record low of 54%. Left-wing candidates won decisive victories in Milan, Bologna and Naples; the right-wing candidate won in Calabria. (In Italy, the left is always described as “centre-left” these days, and the right as “centre-right”, even though plenty of elements in both are rather far from the centre, and not at all moderate either.) Rome, Turin and Trieste all have to go to a second round of voting on October 17th as no candidate achieved 50%. It’s tight, but the left looks well positioned to win in Rome and Turin, while the right should take Trieste. On balance, it was a much better set of elections for the left than the right, but that chiefly reflected the particular cities that were up for grabs. End of excitement.

End also of real lessons for national politics, bar one: that the populist, anti-establishment Five Star Movement, whose victories in Rome and Turin five years ago marked the beginning of that movement’s shake-up of national politics, is now a much-diminished force, just as the national opinion polls have been telling us for a long time. These polls confirmed that when Five Star runs on its own, it loses: the incumbent mayor of Rome, Virginia Raggi, came third; the movement’s new candidate in Turin achieved less than 10%. If it runs in collaboration with the Democratic Party, however, as it did in Bologna and Naples, the parties’ joint candidate stands a good chance of winning.

This still, however, does not guarantee that whenever national elections take place the Five Star Movement, the Democratic Party and the numerous smaller splinter parties on the centre-left will actually join forces. Too many in each group (and in the splinters) considers the others to be their enemy, and think that operating on their own they can still wield power, even if not national power. This is despite the fact that what the polls show, and these local elections confirmed, is that arithmetically the country is quite evenly divided between left and right, so that in the national election victory is likely to go to whichever side can put divisions and personal rivalries to one side and run as a unit, unless the electoral law will be changed by then, which looks unlikely. The current electoral system includes a lot of single-member seats most of which need to be contested by coalitions if they are to be won. The right has plenty of divisions too, especially between the League, which is part of the current governing coalition and the further right Brothers of Italy, which is not, and which as a result has overtaken the League in opinion polls. Nevertheless, they look likely to contest the next general election together, along with Silvio Berlusconi’s smaller Forza Italia fan-club-cum-party.

So now to the much bigger issue. This is the issue of what is going through Mario Draghi’s mind. Italy’s current prime minister, sitting at the head of what is in effect a “grand coalition” in Parliament and who took office in just February of this year, knows that the lifespan of his government can last only until the next general election, which the constitution stipulates must take place at the latest by June 2023. He wants to be a great reformer, helped by having cash to spend, but knows that he has a limited time in which to achieve his reforms. At some point before that date the present political ceasefire which has made this grand coalition possible will inevitably come to an end, and campaigning will begin for the election. The “grand coalition” (Italians usually call it a “broad” coalition) may even fall apart.

It may not seem right now as if there is a political ceasefire, for every major legislative proposal the Draghi government makes causes an argument with somebody in the coalition, usually though not only the right-wing League led by Matteo Salvini. The latest, this very week, has been about fiscal reform. But for the time being those arguments are just theatre. The League flounces out of a room or two, or abstains on a key vote, but gives way in the end, especially if Mr Draghi has been nice to them in some inconsequential way. Yet at some point next year the arguments will become real, because they will start to count for the election.

What Mr Draghi has to think about is when that point will be. When will his undoubted popularity and prestige, along with the national imperative of managing the spending of billions of euros of cash from the EU Next Generation Fund, no longer be sufficient to preserve the ceasefire? Will that point be in the second half of 2022, giving him another 6-8 months from now to get his reforms through? Or might it even be in the first half? The answer to this question is also therefore an answer to the important question of how much legislative reform the Draghi government can hope to achieve.

The reason why this matters, as those cognizant with Italian politics will know, is that in February 2022 the country’s two houses of Parliament are due to choose a new head of state, a new President of the Republic, to succeed the incumbent Sergio Mattarella for a seven-year term (who insists he will not agree to stay on, even just for a year). The one party outside the coalition, the far-right Brothers of Italy, would very much like that new president to be Mario Draghi and keeps saying so, in the hope that this choice would precipitate early general elections. So would the League, almost certainly. And if Mr Draghi were to allow his name to be put forward for election, he would very likely be chosen, because in that circumstance the left would be hard-pressed to oppose it.

But will he? As people in Rome say, only Mario Draghi knows the answer to that, and even he is probably not yet sure. One consideration must be what kind of political legacy he wants to leave. He is a public servant, not a politician, and clearly has a strong sense of duty. He doesn’t particularly like gadding about in Rome and goes to his home in the Umbrian countryside whenever he can. That consideration might suggest that he will politely decline any offer of the presidency and choose to spend 2022 getting as much done as he can and setting up a framework for public spending and taxation that is as hard for successor governments to change as is possible.

On the other hand, he is a highly rational man. He knows that the political situation will deteriorate during 2022. He will be aware of the risk that new coronavirus variants or other setbacks might necessitate the imposition of new restrictions and might slow or halt Italy’s economic recovery, which would in turn make it harder for him to get legislation passed. He knows his alternative is a seven-year term as president, resident in the grandeur of the Quirinale, from which previous presidents have managed to exert a growing amount of influence, not on day-to-day government but on the broad framework within which it operates, and certainly too on the public debate.

If he were to agree to go “up the hill”, as Italians say, to the Quirinale, one factor may well be whether or not he thinks a 2022 election can be avoided. There is nothing automatic about his ascent causing early elections, and he certainly will not agree to them as a condition of doing so. More probably, as new president he would first seek to see whether any new government could be formed, which is arithmetically possible were the warring parties of the left — Five Star, Democratic Party, Matteo Renzi’s Italia Viva, Free and Equal, Carlo Calenda’s Azione — to be able to find the basis for a reprise of the grouping that ran Italy from September 2019 until early this year. As I wrote on May 29th this prospect may well be why a former prime minister, Enrico Letta, agreed to return to Italian politics to lead the Democratic Party earlier this year: he would like to have another spell in Palazzo Chigi (and this week succeeded in getting himself elected to the Chamber of Deputies, in a by-election in Siena). Or such a grouping could be led by a more independent figure, such as Enrico Giovannini, an economics professor who is minister for infrastructure in the Draghi government.

That’s the issue that must be running through Mario Draghi’s mind: can he still get things done if he stays prime minister next year? Can another government be formed to keep getting things done for much of the year, if he ascends to the presidency? Or is Italian politics doomed to start focusing on the election as soon as a president has been chosen? Learning what he has decided will be Italian politics-watchers’ New Year’s gift.