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Can ‘Super Mario’ Save Italy? Virus-Stricken Country Pins Hopes on Former Banker

Italy's government crisis may be over for now after Mario Draghi, a former European Central Bank president, was appointed prime minister over the weekend. He is viewed by many as the best choice to lead Italy's recovery from the pandemic.

CASTELBUONO, Sicily (CN) — They're calling him “Super Mario” and the expectations couldn't be any higher in Italy and in Brussels for what he can do to bring stability to one of Europe's most crisis-prone nations.

Italy has a new prime minister by the name of Mario Draghi, a 73-year-old former European Central Bank president tapped to lead a new “unity government” supported by nearly all Italy's major parties. He was formally given the mandate to be prime minister over the weekend and Italy's upper and lower chambers of parliament are expected to back his premiership later this week in confidence votes.

Dubbed “Super Mario” by Italian media, Draghi is not affiliated with a political party and he is viewed as a highly competent and respected technocratic leader suited to guide Italy through its recovery from the coronavirus pandemic, an event that many see as its worst crisis since the end of World War II.

“With Draghi in power, Italy will be led by a heavyweight,” said Luigi Scazzieri, a research fellow at the Centre for European Reform think tank, in a recent briefing note.

Draghi's emergence as Italy's new prime minister following the collapse of a coalition led by the anti-establishment 5-Star Movement at the end of January has been welcomed by financial markets, much of the national and European press and bureaucrats in Brussels, the European Union's capital.

Many on the hard left and hard right in Italy, though, see him as the choice of banks and Brussels and hardly the kind of leader who will deal with what they see as the country's deepest problems, whether that be its membership in the EU or hurdles to lifting up Italy's poorer southern regions.

For the moment, Draghi is viewed as the best person to give Italy and its warring political factions some breathing room – and stability – before the country heads to the polls again. The next general elections are slated to take place before June 1, 2023. Still, political experts believe Italy's political scene – and Draghi's crisis government – may implode before that when a new Italian president will be chosen in February 2022.

The president is elected by the parliament and holds a mostly ceremonial position under the Italian constitution, but the officeholder also has many powers, such as naming prime ministers. President Sergio Mattarella, for example, picked Draghi as a candidate after the political parties failed to reach a consensus.

Draghi's appointment staved off the possibility of early elections, something Italy's biggest party, the 5-Star Movement, dreads due to its collapse in the polls since it took the reins of government after emerging victorious in 2018 elections.

As the head of the EU's central bank, Draghi is portrayed as the savior of the EU's financial system when he said in 2012 that the bloc would do “whatever it takes” to keep the euro currency from collapsing. At the time, the EU was under immense strain in the wake of the 2008 financial crisis because of the massive public debts held by some nations, particularly Greece and Italy.

When he took over the EU's Frankfurt-based central bank in 2011, Europe was in a deep crisis and Draghi rose to the occasion, arguing for more financial and banking integration among EU nations and speaking out against austerity measures. With Europe and Italy again in crisis, many hope Draghi's elevation to Palazzo Chigi – the prime minister's building – will bode well for the European project and see “Super Mario” come to the EU's salvation again.

New Italian Premier Mario Draghi presides over his first cabinet of ministers reunion after the swearing-in ceremony, at Chigi Palace Premier's office, in Rome, Saturday, Feb. 13, 2021. (AP Photo/Andrew Medichini)

Italy's public debt soared in the past year and now stands at about $3 trillion – or roughly 160% of its gross domestic product – and experts see the country’s economic and financial woes as posing a major risk to the entire EU financial system. Most troubling is the prospect that Italy one day will be unable to service its debt payments.


With the likelihood that he will build confidence in Italy and handle the crisis efficiently, Draghi may be the steady hand needed to help not just Italy but the entire EU, experts say. His extensive experience and respect within EU political and financial circles also are being touted as a boost to EU cooperation and giving Italy a bigger seat at the table of EU decision making.

“Draghi’s competence and standing will, at least in the near term, reassure bond traders eyeing Italy’s large debt stock,” Scazzieri said. “Since he has been asked to form a government, interest rates on Italy’s government debt have already fallen. Draghi will also boost Italy’s international profile, in the EU and globally.”

Since the rise to power of the 5-Star Movement – a maverick direct-democracy party – and the League – a far-right nationalist party – in the 2018 elections, Italy has been viewed with skepticism by Europe's major powers, Germany and France, whose leaders are waging their own domestic battles to stem both rising disillusionment with Brussels and the EU project and support for anti-EU parties. Both the 5-Stars and the League gained in popularity due to their anti-EU rhetoric.

Meanwhile, Italy's establishment parties, the center-left Democratic Party and center-right Forza Italia, led by former Prime Minister Silvio Berlusconi, have struggled in recent years. These four parties are backing Draghi for now and the only major party to oppose his premiership is the Brothers of Italy, a descendant of a neo-fascist party that has seen its support swell in recent months.

Draghi's political abilities will be severely tested. He will be leading a country that has been hit hard by the coronavirus pandemic. Italy has recorded more than 93,000 deaths since the virus was first found circulating in and around Milan, its financial and economic capital, last February. Since then, Italy's economy – sluggish even before the pandemic – has sunk and new data shows Italy's gross domestic product fell by 9% last year.

Draghi's central job will be to set up a program for the distribution of more than $240 billion in funds the EU is allocating Italy as part of a larger EU-wide pandemic recovery package.

In large part, Draghi owes his new job to former Italian Prime Minister Matteo Renzi, a crafty center-left politician who pulled his small party's support from former Prime Minister Giuseppe Conte's coalition, causing the government to fall. Renzi withdrew his support from Conte over personal grievances and allegations that Conte would squander the billions of dollars Italy is set to receive.

Italy's complicated politics will test Draghi's abilities to keep disparate and opposing parties from falling out and causing his government to fall. The prospect of a government run by Italy's major parties from opposing camps is a recipe for intrigue and disagreements.

“If history is any guide, political stability is far from being Italy’s best suit, and even ‘Super Mario’ is likely to find maintaining his majority difficult in Italy’s fragmented parliament,” said Manuela Moschella, a political scientist at the Scuola Normale Superiore in an analysis for Chatham House, a think tank.

Sergio Cesaratto, an economics professor at the University of Siena, said Draghi and the $240 billion in recovery funds at his disposal will not be able to bring Italy out of its doldrums.

“In truth, this money is not much, it will be spent over many years, and much of it was already budgeted,” Cesarotto said in an interview with Brave New Europe, a left-wing news analysis website.

“There will be an advantage if they are spent more quickly in a country where bureaucracy and a thousand anti-mafia controls slow down the speed of public investment,” he added. “In fact, Draghi means a European commissioner of the recovery plan. This might lead to greater efficiency, but the recovery fund will not get us out of the crisis.”

Courthouse News reporter Cain Burdeau is based in the European Union.

Follow @cainburdeau
Categories / Economy, Government, International, Politics

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