Mario Draghi has agreed to continue as caretaker prime minister for Italy. Elections are scheduled for September.
Andreas Solaro / AFP via Getty Images
hide captions
switch captions
Andreas Solaro / AFP via Getty Images
Mario Draghi has agreed to continue as caretaker prime minister for Italy. Elections are scheduled for September.
Andreas Solaro / AFP via Getty Images
Italian officials and voters alike are weighing in on Prime Minister Mario Draghi’s resignation last week – and experts say it’s for good reason.
Draghi was appointed to the post in February 2021. For the past year and a half, Draghi has been heralded for his role in leading Italy out of the economic and health crisis. Many hope for Draghi’s guidance as Europe faces soaring inflation and Russia goes to war with Ukraine.
He is credited for restoring the Italian economy and reputation. Now, experts warn that the two are in balance as uncertainty grows in Italy and Europe in general.
“Mario Draghi is a trusted hand across Europe,” said Christopher Way, an associate professor of government at Cornell University specializing in European politics. “He is so respected for his prowess that whoever replaces him is a loss.”
Italy is scheduled to hold early elections on September 25, but it may be several months before a new coalition government is formed. (Back in 2018, it was 90 days after the parliamentary election for a new government to be sworn in.) Until then, Draghi has agreed to stay in office as a temporary carer at the request of President Sergio Mattarella.
The fall of the current Italian government
Called the government of national unity, different parties across the whole of Italian politics joined together to deal with the pandemic. According to Way, for a while, the government had a rare period of stability.
But that didn’t last with the government’s term of office originally set to expire in the spring of 2023. Way said party leaders began vying for positions before next year’s election, which is why the infighting in parliament began.
It all happened this month as Draghi tried to lobby for a key relief bill, designed to help consumers and industries with soaring energy costs.
Populist 5-star movement refuses to support bill, raising concerns about how a new incinerator for Rome may affect the environment. Then the League, a far-right group, and Forza Italia, a centre-right party, followed suit and refused to support the prime minister.
Although Draghi is still widely supported by the president and some groups in the coalition, he offer to resign to deal with the turmoil. His resignation was first rejected but eventually accepted by the president after it became clear that the coalition was no longer cooperating.
“Much of the national unity that has sustained this government since its founding is gone,” Draghi wrote in a statement before submitting his resignation on Thursday.
Uncertainty of the Italian and European Economy
Last summer, the European Union gave Italy billions of dollars in aid to recover from the pandemic on the condition that the country would prioritizing economic development and debt management.
As a former head of the European Central Bank, Draghi was charged with handling Italy’s bailout funds and financial arrangements – for the benefit of the country and the rest of Europe.
That especially puts the European Central Bank in a difficult position, Way said. As inflation escalates across Europe, the bank will need to raise interest rates quickly, but doing so will also increase Italy’s debt and pose risks to the sustainability of Italy’s finances.
As the third largest economy in the euro area, both options are likely to have ripple effects in Europe and the United States.
“The ability to destabilize the Italian economy and its sovereign debt market has a major impact on the European Union and the viability of the euro,” Way said.
Now, with Draghi’s departure, there is growing concern about whether the next elected government will be financially responsible and continue to commit to the economic reforms laid out by the EU.
Europe’s united front against Russia’s war in Ukraine may be at stake
Since Russia invaded Ukraine, Europe has been able to unite on a strong united front against Russian leader Vladimir Putin. But that could change depending on the outcome of the upcoming Italian election, said Lucia Rubinelli, an assistant professor of political science at Yale University who has studied Italian politics.
“Draghi is definitely a leading force in Europe against Russia,” said Rubinelli. “The problem with Draghi is gone is that Italy and many Italian parties have for a long time treated Russia under better, friendlier terms.”
Among the coalition’s leading contenders are the Federation and Forza Italia, both of which is believed to be closely related with Putin. If they are elected to the next government, Rubinelli thinks EU strategies – including sanctions on Russia and military aid packages to Ukraine – could become more complicated.
Rubinelli added that Italy will likely continue to cooperate in EU plans against Russia. But the bigger question is what Italy’s next elected government might want from the EU in return, which could be issues like lift specific sanctions or freely enact stricter immigration policies.
