All told, nearly €209 billion will be made available to Italy in a mixture of loans and grants, but getting the full amount depends on Brussels signing off on Italy’s reforms.
Then comes the hard part-figuring out how to structure and disburse the stimulus windfall coming Rome’s way. more stimulus for families and businesses). He also will be tasked with figuring out if and how to extend economic support for the Italian people to keep them afloat through the next phase of the pandemic (i.e. countries ceded to Brussels, for better or worse), but he will have to decide whether to extend the country’s lockdown which is scheduled to expire in a few weeks. Italy doesn’t have much ability to speed up or change vaccination rollout plans (something E.U. As of this writing, it’s looking like technocrats and major politicos will form the cabinet, but the most critical ministries are likely to go to technocrats-finance, foreign affairs, justice and interior.ĭraghi’s immediate priority is the pandemic. Second, he also is rumored to be a frontrunner to replace Mattarella as president of the country next year when Mattarella’s term is set to expire, which means that he doesn’t represent that much of a political threat to the future aspirations of other party leaders-this is an emergency situation, and Draghi is being called in for a short amount of time to help set Italy on a sustainable path. First, he doesn’t have to implement austerity measures like previous technocratic Italian governments were forced to do (indeed, it’s the opposite given the Recovery Fund and low rates for borrowing), he commands an incredible amount of respect abroad and at home, and he’s a technocrat who has wrangled with both Italian and Brussels politics for decades and knows how to play the game, something other technocratic prime ministers have struggled with.
But there are a few things going in Draghi’s favor. Italy has often had to cycle through technocratic governments as a stop-gap measure between elections. Plenty of politicians in Rome are willing to take the stability that a Draghi government represents in the interim, especially as the country needs to hold elections no later than spring of 2023. It also helps that most parties are wary of returning to elections, as the pandemic has upended the country and with it their political calculations. That gave way to relief as Draghi commenced talks with all the parties Draghi’s unique stature makes him well liked by the Italian populace ( 70%+ approval rating), and his competence has most every party in parliament willing to support him in these early days. Sergio Mattarella, the country’s president, tried to get Italy’s political parties to reach a compromise to form a new government, but when that failed, he made the surprise decision to charge Mario Draghi with the task of forming a new government to avoid a new election in the midst of the pandemic. It’s not just a question of divvying up the money according to political priorities accessing the full amount of funds available requires serious (and painful) structural reform. This latest coalition fell apart over disagreements over how to distribute more than €200 billion worth of funds earmarked for the country from the E.U.’s coronavirus Recovery Fund. The one constant of Italian politics since World War II is the country’s struggles to keep its coalition governments together the last few years have been no different, as subsequent governments (first between the anti-Establishment M5S and far-right Lega, then between M5S and the center-left Partito Democratico and Italia Viva parties) have collapsed. policymaking is undermined by perpetual economic and political dysfunction.
Italy is the Eurozone’s third-largest economy (behind only Germany and France), but the influence its economic heft should afford it in E.U. But he faces his greatest test yet in getting Italy’s politics and economics back on track. The former head of the European Central Bank, affectionately dubbed “Super Mario” by the press, is a skilled political operator hailed for almost single-handedly rescuing the Euro currency in the depths of the Eurozone crisis. Mario Draghi is about to be sworn in as Italy’s next prime minister.