20 July 2022updated 21 Jul 2022 11:23am

Italy’s economy needs a technocrat prime minister, but voters are weary of rule by experts

Fiscally, it would be a terrible time for the country to lose Mario Draghi – another election would only risk more damage.

By Helen Thompson

In Rome, Mario Draghi’s tenure as prime minister is unsettled. On 14 July, the Five Star Movement – part of a grand coalition of parties supporting Draghi’s government of national unity – boycotted a vote of confidence in Draghi in the Italian Senate. Five Star’s leader Giuseppe Conte charged Draghi with failing to address Italy’s cost-of-living crisis. Draghi offered his resignation hours later, only for Italy’s president, Sergio Mattarella, to refuse him. In Frankfurt, the European Central Bank (ECB) breathed easy – another infelicitous Italian election had been temporarily averted.

There is a manifest pattern to Italian politics at present: in response to various economic crises, governments voted into office in general elections are replaced before too long by radically different – and often unelected – ministries.

In November 2011, Italy was mired in a borrowing crisis. In response, its president Giorgio Napolitano orchestrated the removal of Silvio Berlusconi as prime minister and appointed the former European commissioner Mario Monti to assemble a technocratic cabinet. Within a year of the 2013 general election, the young mayor of Florence, Matteo Renzi, was made prime minister to implement labour reforms that would satisfy the ECB. Just 34 months after the 2018 election, Italy was on to a third government. None of these administrations has been headed by an elected politician, despite two insurgent parties – Five Star and La Lega – having won 50 per cent of the vote in 2018, and still retaining some support.

The appointment of Draghi, a former head of the ECB, as Italian prime minister in February 2021 was the latest instance of imposed technocracy. To keep Italy’s borrowing costs down, there has to be a government in Rome acceptable to the ECB and Berlin. This imperative only intensified after the ECB introduced the €1.8trn Pandemic Emergency Purchase Programme and the EU established the €800bn NextGenerationEU fund to help countries recover from the Covid-19 emergency. Draghi was propelled into office because of the concerns about how Conte, who headed a grand coalition cabinet between September 2019 and February 2021, planned to spend these funds.

Inflation across the eurozone has now dramatically raised the risk that Italy’s debt poses to the remaining members of the single currency. The ECB knows it has to increase interest rates, but has been slow to act compared to the US Federal Reserve and the Bank of England. The principal reason for this caution is Italy: already, Italian borrowing costs have risen above Germany’s. If the ECB allows different eurozone members to borrow in capital markets at different yields, then Draghi’s declaration as ECB president in 2012 that he would do “whatever it takes” to end the eurozone crisis will unravel.

After an emergency meeting on 15 June, the ECB announced that it was accelerating its plans to combat the “fragmentation” in borrowing costs. It is unclear what specific measures will be enacted that could stabilise Italian bonds or help the Italian economy. Even without Draghi’s resignation, bond markets are spooked: the day after Draghi went to see Mattarella, Italian bonds were trading 2 per cent above Germany’s – the very “fragmentation” the ECB is trying to avoid.

Economically, it would be a terrible time for Italy to lose Draghi. The country has to have a government that can receive the next tranche of EU recovery-instrument money without igniting a crisis of confidence inside the EU. But the fact that the Italian economy depends on permanent technocratic rule is unsustainable when large numbers of Italian citizens continually vote for the parties explicitly promising to end rule by experts.

Giorgia Meloni’s far-right group, Brothers of Italy, is now polling ahead of all other parties. Its position on Italy’s euro membership is similar to those of the Eurosceptic Five Star and Matteo Salvini’s La Lega during the 2018 campaign – the two parties that formed Italy’s first government after that election, but who couldn’t provide a prime minister or a finance minister from among their own MPs.

Italy will hold another election by 1 June 2023. Given the country’s need for external monetary support, the parties are unable to structure any kind of democratic contest over the economy. Geopolitics is also narrowing political debate. Five Star has split over Draghi’s strong support for Ukraine. Conte believes that the energy and food crisis caused by the war is unbearable. This led Italy’s foreign minister, Luigi Di Maio, Five Star’s most senior minister, to leave the party in support of Draghi. Conte’s defection from Draghi will once more lead the party to adopt the kind of insurgent agenda it had before it was in government. But these anti-establishment parties can only fight over the electoral spoils of voter discontent, not win the right to govern according to them.

The form and substance of political contest in Italy has been reduced to personalities. Each national election appears to risk the empowerment of an individual seemingly more dangerous to democracy than the last: first Berlusconi, then Salvini, now Meloni. But the technocratic Draghi is as much part of this personality politics as his insurgent opponents: the intelligent, non-boorish Strong Man who is supposed to save this democracy not by winning elections but by rendering them meaningless.