Nearly a year ago, Mario Draghi was called to the flag by the Italian president to save the country from a political crisis and to rehabilitate the economy from the aftermath of the corona crisis. The former president of the European Central Bank was “parachuted” from the outside due to his public status, and managed to form a kind of functioning unity government, in which the representatives of the major parties served together with expert ministers. The Italian growth figures since then have been impressive, as has political stability, and the state has promised Brussels to implement some necessary reforms that should put it on the highway of national debt reduction, high growth and structural changes that will allow for future prosperity.
But now the existing government may face dissolution. The reason is not internal political conflicts as in the past, but rather Draghi’s possible promotion to the highest position in Italy. Incumbent President Sergio Materella is set to step down in early February, after a seven-year term as stipulated by law, and Draghi is considered the most prominent candidate to replace him. As president of Italy, Draghi will hold mostly symbolic positions, but the senior ministry – as its own appointment has shown – has a crucial position in political affairs because it can appoint prime ministers, declare an external expert government and advance the general election. His promotion to the position may be a blessing for long-term stability in Italy, but at the cost of instability in the coming months.
The Italian presidential election has strange characteristics: almost no candidate usually officially announces that he is running, and there is no locked list of candidates. They are conducted in secret ballots by more than 1,000 members of parliament plus regional representatives, and have often been compared to the election of the pope behind closed doors in the Vatican. The selection process itself will take place in the third week of January, on the 24th of the month.
Complicated procedures have already been the subject of a cinematic parody (of an anonymous candidate elected president because of a mistake in the name and gaining popular sympathy) and also historical precedents, like a president who managed to be elected as a compromise candidate after countless rounds, even though in the first round he received only eight votes.
It is not clear how the economy will be affected
In recent months, the Italian media have been wondering, in particular, whether Draghi is indeed preparing to run, and how this will affect the Italian economy, which has found itself in a relatively good position under his leadership. It seems that in recent weeks the pur has fallen. In a New Year’s speech last week, Draghi told the public that he could be referred to as a “grandfather in the service of public institutions,” which was perceived as a sort of code word for the president. The Italian economist, who was educated in a Jesuit school, also said that “my personal destiny does not matter. I have no special ambitions.” He then added that the government he led “had achieved the goals we had set for ourselves”, hinting that the budget it had managed to pass paved Italy’s path to economic success.
The other prominent candidate in the election, at least in his own eyes, is the tireless politician Silvio Berlusconi, 85. Despite the corruption scandals, despite previous convictions and despite open investigations, the four-time Italian prime minister has made it much clearer than Draghi that he considers himself a candidate for the presidency of Italy. Openly, some of the right-wing parties in Italy like “Italian Brothers” and “Lega” have announced that they will support him. Behind the scenes, following the clashes that took place between these parties and the “Italy Breakthrough” party led by him, they may be elected by another candidate in the secret ballot. Commentators have estimated his chances of being elected “very low”, but Italian politics have previously hinted that it may be unpredictable.
Italy could go into turmoil
Even if Draghi’s election to the presidency seems imminent, it could shake Italy – which has experienced a rare year of relative stability and calm on the political front, after a string of crises and a constant threat to go to the polls. The new government appointed in February 2021, led by Draghi, presented a comprehensive plan on how to get out of the severe economic crisis caused by dealing with the corona. It also decided how to distribute in the next seven years a sum of close to 200 billion euros, which Italy would receive from the European Union (half as a grant), as a result of a fund set up to rehabilitate the continent. The government predicts in recent estimates a reduction in the debt-to-GDP ratio from 153% to 149% (the second highest in the eurozone after Greece), a reduction in the annual deficit from 9.4% to 5.6% and a growth of about 4% in the coming year.
PM Olmert, Mario Draghi / Photo: Associated Press, Alessandra Tarantino
Draghi enjoys a reputation and public support in Italy that almost no other figure has. He served until 2019 as President of the European Central Bank (ECB), and is considered the one who “saved” the eurozone in the series of crises it experienced by adopting quantitative easing policies and incentive programs, and uncompromising support for the euro. His government last week managed to pass a budget worth 32 billion euros, which includes reforms to the pension system and tax cuts for companies and employees.
If he leaves the government and moves to the presidential palace, Italy may re-enter a period of political uncertainty, and elections may take place this year, instead of in the summer of 2023 as planned. According to the polls, if the general election had been held today, a center-right coalition would probably have been formed under the leadership of “Lega”, “Italian Brothers” (now in opposition) and “Italy Breakthrough”.