Draghi’s departure is a big loss for Italy

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The resignation of Italian Prime Minister Mario Draghi, after his fractionated ruling alliance melted away due to infighting, is undoubtedly a major jolt for the political spectrum of this country which has been witnessing one of the world’s longest volatility in the post-war era; 19 Prime Ministers in 33 years. Mario Draghi, the highly respected former European Central Bank chief, admired for his instrumental role in saving the single currency in the Eurozone crisis of 2012, certainly brought a totally new element of stability, maturity and calmness in Italian politics with his trade-mark tranquillity and a gravitas to tackle Italy’s problems.

Two kinds of reactions are being witnessed over Draghi’s sudden departure: inside the country, recent opinion polls suggest that overwhelmingly majority of Italians want Draghi to stay in office to steer Italy through its economic and geopolitical challenges and they are very much concerned over his removal from power, while outside the country, Putin is quite happy with the removal of Draghi from the scene which has paved the way for the pro-Moscow political elements in Italy to gain power.

Italy is among select-few Western European countries, where pro-Russia political forces have a reasonable clout and Putin needs such supportive voices in the wake of the Ukraine invasion. The dissolution of Italy’s Government is being considered a major win for Russia’s President Vladimir Putin in Western Europe.

Betrayed…

Draghi has acted as a major resistance to Putin’s influence in Italy and Europe, while his other three coalition partners who are responsible for Draghi’s downfall are considered to be the sympathisers of the Russian dictator. Giuseppe Conte, the head of what remains of the rapidly dwindling Five Star Movement have openly spoken in favour of the removal of sanctions against Russia and called for Moscow’s return to the G8 in 2018.

Five Star’s close links to Russia date back to the Crimea annexation in 2014. League leader Matteo Salvini’s support for Putin is also a known fact:in 2017 Salvini’s League signed a formal cooperation agreement with Putin’s party United Russia. Media reports also suggest that funds were allegedly funnelled from Russia to the League involving men close to Salvini and Putin – a judicial inquiry for international corruption is already being conducted on this controversy. At the same time, Forza Italia’s head, Silvio Berlusconi, is known as an old buddy of Vladimir Putin. They have hosted each other in their holiday homes and both were close supporters of each other on the international scene when Berlusconi was Italian prime minister in the 2000s.

The two leaders also have allegedly joint commercial interests. After the invasion of Ukraine, Salvini’s condemnation was very vague “all military aggressions”, and only after some pressure from the Italian public he acknowledged that “Russia is wrong”, but barely ever mentioned Putin’s name since then. Similarly, Berlusconi was completely mute for a month and a half after the Ukraine invasion before saying that he was “deeply disappointed and saddened by Vladimir Putin’s behaviour”. Conte’s condemnation of the Russian invasion has been also equally fuzzy, but his recent position against sending more arms to has been obviously construed as a sign of soft support for Russia. Draghi’s exit has emerged as a plus point for Putin, but still a lot depends on the results of the forthcoming elections in September.

There is no doubt that Mario Draghi was the first person in decades who brought the concept of “somewhat stability” in Italian politics and economy and things appeared to be in right direction for the country. There are ample reasons to believe that Draghi’s stint was scuttled indirectly by Vladimir Putin through his “friends” in the ruling alliance who refused to support Draghi in the no-confidence motion.In early 2021, a national unity government –comprising the centre-left Democratic Party, the anti-establishment populist Five Star Movement, populist firebrand Matteo Salvini’s hard-core nationalist Lega, and former Prime Minister Silvio Berlusconi’s Forza Italia -was formed under the premiership of Draghi, who steered Italy through its Covid-19 crisis very well.

His cross-party coalition was quite successful in steadying a faltering vaccination drive and managed a vigorous economic rebound from 2020’s GDP shrinkage of nine per cent as well as convinced Brussels to approve EUR 200 billion to support his economic reform agenda from the EU Covid recovery funds. But he appeared increasingly frustrated by the complexity of coalition negotiations over his proposed reforms, which included updating property registers to improve tax collection, auctioning lucrative beach concessions and a new competition law. His gristly aggressive stance against Russia’s invasion of Ukraine was also one of the key reasons for cajoling his coalition partners to desert him.

Tension finally reached boiling point when Five Star boycotted a vote on a EUR 26 billion aid package to shield Italians from inflation because of its opposition to the inclusion of a controversial waste incinerator for Rome, which faces a crisis over the disposal of rubbish. But in June, the coalition started to fall apart like a house of cards. A deep internal rift of the Five Star Movement was followed by another row between Five Star and Lega, provoking ultimatums to the Draghi regime. When Five Star threatened to leave the Government, some analysts were expecting that Draghi would continue as Prime Minister with a slimmer coalition, however, when the Lega and the Forza Italia demanded an exorbitant price of their continued support in the form of a weighty right-wing government in place of a unity coalition, Draghi opted to leave the stage. Though there is no concrete and tangible evidence to corroborate the rumours that Moscow was pulling the strings from the behind to ensure the collapse of the Draghi government, but it is also a fact that Putin is the major beneficiary of this episode in Italy.

Sticking to his guns

In 17 months of his stint as premier, Mario Draghi, who has been asked by President Sergio Mattarella to continue his work as the caretaker PM till the 25 September elections, has proven his mettle as a brilliant statesman who has been able to keep Italian economy on the right track against the backdrop of pandemic and then unexpected fuel and food crisis due to a war on the eastern fringes of the European continent.The credit goes to Draghi’s intense efforts to swiftly finding alternative sources of gas to reduce dependence on Russia.

After the Russian invasion of Ukraine in February, Italy has secured increasing supplies of Algerian gas, which could also be channelled further northwards to Germany. The political crisis and departure of Draghi does not augur well for Italy at this time when the global economy is passing through highly uncertain and volatile phase. The most urgent matter is the approval – in the budget – of the reforms the European Commission is demanding in exchange for a promised EUR 200 billion in grants and loans from the EU’s pandemic relief fund. That process will now be delayed till the new government takes charge. Now all eyes are set on the 25 September elections. The recent surveys are indicating that an alliance of Italy’s right-wing parties is likely to form the next government. Salvini’s Lega and Berlusconi’s Forza Italia will be able to muster handsome number of seats,however, the nativist Brothers of Italy is predicted to grab the major chunk, which means Italians may be having Giorgio Meloni as their first female Prime Minister.

Meloni, 45, a staunch right winger,has limited experience of government.She served for three years as Youth Minister in the Berlusconi government in 2008. This is the only government experience she has ever had. Being a founding member of the intensely anti-immigrant Brothers of Italy, she is expected to keep anti-migrant stance as one of the key planks of her election campaign theme. She is not in a position to stick to her nuanced approach towards the EU, in the wake of the Ukraine crisis and Italy’s too much dependency on the financial support from the EU funds.

She has been an advocate of amendments in the EU treaties so that Italian law could supersede the EU rules and regulations. Though she has never campaigned for the exit from the EU as such,but she has been a big critic of the bureaucratic tendencies of Brussels. However, at this stage when Italy desperately needs Euros from the EU, she will have to profoundly tone down her EU rhetoric of the past.  Her ostensible Euro-scepticism will surely be mollified to accommodate the growing sympathies among Italian voters towards EU after the announcement of the relief package of EUR 200billion. But Meloni will have to take some bold and unpopular decisions with regard to the competition laws and tax rules to accommodate the conditionalities of the EU to avoid any cuts in the EU funding.

By DR. IMRAN KHALID