What to expect from the Draghi government
One year of efficient administration amid (more or less) a political ceasefire. Then all bets are off
The proud parents of Italy’s handsome new government should enjoy this moment, for they are unlikely to be this happy again.
President Sergio Mattarella and the new “Presidente del Consiglio”, Italian for prime minister, Mario Draghi have played their roles and their cards perfectly in giving birth to this government of national almost-unity. Opinion polls show a large majority of Italians are happy that this has happened and happy at the prospect that the former president of the European Central Bank will be overseeing their country’s emergence from the pandemic and the beginning of its largest programme of public investment for more than 30 years.
Mr Draghi knows full well that it will largely be downhill from here. That is simply the nature of politics and government. The basic question is whether it will be gradually downhill or steeply downhill.
There is nevertheless a good chance, from Mr Draghi’s point of view, that he will be able to achieve the gradual version. Two things were striking about the way in which he formed his government. One was that he said almost nothing publicly himself about his plans and succeeded somehow in persuading his 23 new ministers to keep quiet too. In a world of constant communication whether through old media or new, and with a government in which seven different political parties are represented, this was quite a remarkable achievement. Perhaps for someone used to tight communications control at the European Central Bank or Bank of Italy this may just have seemed the right way to operate, but you can bet your bottom euro that it didn’t feel that way to the politicians joining the new government and you can be sure that this silence won’t last. The second striking point was that he made his political choices skilfully and in rough proportion to the parties’ parliamentary strengths, but without consulting the party leaders at all. He made absolutely clear who’s the boss, for the time being.
Mr Draghi has two big advantages, beyond his formidable reputation (which goes back, let’s remember, all the way to the 1992-93 public financial crisis, when he was a senior Treasury official). These are the fact that under the Constitution it is impossible for general elections to be called between end-June and end-January, and the fact that his main task is to oversee plans for the €209 billion of public spending being financed by loans and grants from the EU Recovery Fund. There is thus virtually no chance of a political squabble bringing the coalition down between now and end-June: the financial stakes are too high, and there won’t be time for accusations of mis-spending or favouritism to set in. The election ban is in place because that so-called “white semester” is the final six months of the term as head of state of President Mattarella. In January Parliament will have to choose his successor — or re-elect him for a second term, if he is willing to stand again, as his predecessor, Giorgio Napolitano, did reluctantly in 2013 — and only then can any jockeying for elections re-start.
The official line is that Mr Draghi will now be prime minister until 2023, when the Parliamentary term expires and elections must be held. This might turn out to be true, but it would be a mistake to bank on it. For a start, there will be a temptation to elect him as head of state and a temptation for him to agree to the idea — to cash in whatever chips he has by then, in other words. In that case, a vacancy will be created and it is unlikely the current political ceasefire — for that is what a government of national almost-unity amounts to — would endure. One of the main parties that formed the previous, centre-left, government, Cinque Stelle (Five Star) is already imploding. Even if someone else is elected president, the problem for Mr Draghi will be that the clock will be ticking down towards the election, and in politics there tends to be a rush to take advantage and bring the clock forward. Much will depend on how strong the centre-right feels by that stage, but if it does feel strong and likely to win the next election, it will not want to wait. There would have to still be a sense of crisis in early 2022 for the centre-right to feel obliged to stay in the government, and if that is the case, then Mr Draghi will anyway not be in a good position.
His likeliest perspective is one year in Palazzo Chigi, the prime minister’s office. Which means one year of, essentially, trying the set a sort of economic sat-nav for Italy by putting in place plans for public investment and related reforms that are so solid and hopefully widely supported that they will not later be changed, even though they will essentially be five-year plans. Can this be done?
Well, Mr Draghi has organised his government is such a way as to make that sat-nav setting at least possible. He has put three technocrats — non-politicians, in other words — in three ministries that will be central to the drafting and execution of those plans, and chosen a politician from the party likeliest to want an election, the Lega, to head a fourth, thus giving Lega some skin in the game. The technocrats are Daniele Franco at the Economy ministry (what other countries call the finance ministry, or Treasury), having previously been number two at the Bank of Italy; Enrico Giovannini, an economist associated with environmental sustainability, at Infrastructure and Transport; and Vittorio Colao, former CEO of Vodafone, at a new ministry for technology and innovation. The politician is Giancarlo Giorgetti, number two in Lega, who will preside over the ministry of economic development, traditionally the ministry for industrial policy,. Mr Giorgetti is a moderate by his party’s standards and was the man who recently compared Mr Draghi to the superstar footballer Cristiano Ronaldo of Juventus.
Political ceasefires never last, and nor does popularity. Mr Draghi will be well aware of both of those realities. He can achieve a lot through an efficient and effective one year of setting Italy’s economic sat-nav. He laid down the principles for that sat-nav in a speech last August: public investment financed by debt, he said, is acceptable if the investment is the productive sort, but unproductive subsidies and wasteful transfers need to be avoided. After he has done his best to implement that, the country will likely be back to wondering about politics-as-normal and thus the usual crashes, diversions and driver error.