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Draghi completes transformation from central banker to Italian prime minister

A short oath taken on Saturday at the presidential palace in Rome completed Mario Draghi’s transformation from central bank chief to frontline politician.

Draghi has already shown that he will bring the same calibrated discretion to his new role as Italian prime minister that he exercised when he was president of the European Central Bank.

The births of recent Italian governments have typically involved behind-the-scenes briefings, leaks and frenzied lobbying for key ministerial portfolios. This time, however, Draghi deliberately kept the leaders of the main political parties in the dark until the last minute on who among their ranks would do his new government of national unity.

The resulting list of ministers – a mix of lawmakers from all political backgrounds and technocratic experts – will, for the time being, appease the divided parliament that Draghi must do if he is to get Italy out of a double health emergency. and economical.

“I am very impressed with the way he has put together this firm,” said Erik Jones, professor of European studies at the Johns Hopkins School of Advanced International Studies in Bologna. “It is not a purely technocratic government and will have a longer lifespan as a result.”

Erik Nielsen, chief economist at UniCredit, said that a new cabinet comprising members of Italy’s main political parties was the “best possible outcome” that gave Draghi a “mandate to pursue potentially transformative policies in Italy”.

The immediate tasks are to fight the coronavirus, ensure the success of the country’s vaccination program against Covid-19 and contain the economic damage inflicted by the pandemic.

Beyond these immediate and daunting challenges, the former head of the ECB must simultaneously get down to work on drawing up spending plans of € 200 billion in EU stimulus funds, a unique set of loans and grants subscribed by the 27 EU Member States. will likely define the legacy of his post as prime minister.

To ensure that this money is well spent, Draghi’s new government will have to undertake reforms of the Italian public administration and judicial system that have eluded each of his predecessors.

By keeping a significant number of ministers from the previous cabinet of his predecessor, Giuseppe Conte, analysts believe that Draghi has already avoided the problem that doomed Italy’s last experiment of technocratic government under Mario Monti in 2011.

Luigi Di Maio, former leader of the Five Star Movement, retains his post as Minister of Foreign Affairs. Roberto Speranza, the Minister of Health who has played a central role in the country’s fight against Covid-19, will also remain in place, alongside Luciana Lamorgese, Minister of the Interior.

Alongside these survivors of the Conte government, technocrats and allies of Draghi are tasked with the issues most critical to the short and long term success of his administration.

Among the technocrats are Daniele Franco, chief executive of the Bank of Italy who is not aligned with any party and who takes over as Minister of the Economy, and Marta Cartabia, a former president of the Italian Constitutional Court who was appointed Minister of Justice.

Draghi has also placed political appointments in important roles, which means their parties will have to shoulder the consequences of difficult reforms. This includes Renato Brunetta, a seasoned lawmaker from Silvio Berlusconi’s Forza Italia party, who was appointed Minister of Public Administration, a role he held between 2008 and 2011.

“There are many other good choices, with a few exceptions,” wrote Lorenzo Codogno, former chief economist at the Italian Treasury.

This includes Giancarlo Giorgetti, a veteran pro-business politician who represents the League’s dominant wing Matteo Salvini, as Minister of Economic Development. Giorgetti, who has an existing relationship with Draghi, will decide how the EU stimulus funds are spent.

Codogno said the League lawmakers selected by Draghi “are seen as skilled traditional politicians,” while the Five Star Movement ministers were “among the most respected and mainstream” in their party.

Another important signal of Draghi’s intention has been to refuse to appoint a European minister, a move interpreted as showing that he intends to take close control of Italy’s talks with the EU.

Draghi is expected to deliver his first speech to Italian lawmakers next week, an appearance which is expected to provide more details on how he intends to start tackling the urgent tasks ahead.

Having secured the support of almost all major political parties – with the exception of the Brothers of Italy of Giorgia Meloni – he will start his life as Italian Prime Minister with a huge majority. How long will he be able to keep the country’s lawmakers on the side as he begins to work on reforms that may be difficult to test his as yet unproven skills in frontline politics.

“There will be a honeymoon phase where people inside and outside of Italy will be in awe that the country has a high profile leader,” Jones said.

But he also said that running a “top-down organization like the ECB” was very different from the “ideological conflict” and the challenges Draghi would face as prime minister.

He added: “There are nagging questions in the back of everyone’s mind if Italy can really be changed.”

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