Friday July 22, 2022

Italy faces crisis as Draghi steps down

Italy faces crisis as Draghi steps down

Mario Draghi

Mario Draghi, the prime minister of Italy resigned, as his fractious coalition members continued to bicker and Five Star withdrew its support. Draghi formed his government in February 2021 and did take measures to resolve the cost of living crisis plaguing Italy and the rest of Europe. Draghi, former governor of the Italian central bank as well as the European Central Bank (ECB), brought gravitas and a cool mind to tackling Italy’s problems.

He managed to garner part of the 200 billion euros from the European Commission, and he also took a firm stand on Ukraine which helped bring Italy centre stage in Europe. The virtues of Draghi melted away in the heat of Italian politics. Poll surveys predict the victory of conservative coalition in the elections, which could be held as early as October though elections are due in 2023. Mario submitted his resignation to President Sergio Mattarella, who had asked him to stay on as caretaker prime minister. Mattarella can explore the possibility for the formation of a government, and if he does not succeed he will have to call for early elections. In his brief stint, Draghi managed to a sense of credence to the unstable governments that Italy had witnessed since the end of the Second World War.

The 5-Star Movement, part of the coalition government of populists from the right to the left, had refused to participate in a confidence motion on a bill to help Italians deal with the economic crisis, and it has not backtracked from its demand for a basic income and minimum salary. Before submitting his resignation to the president, Draghi told the lower house of the Chamber of Deputies that that they have to answer the Italian people. There was a round of applause for the outgoing prime minister, and Draghi responded, “Even central bankers have their hearts touched sometimes.

Thank you for all the work done in this period.” Appealing for political unity, Draghi told the deputies, “You don’t have to give the answer to me. You have to give it to all Italians.” Centre-left’s Democratic Party leader Enrico Letta felt that Parliament betrayed the people, and said, “Let Italians show at the ballot that they are smarter than their representatives.” The right-wing Brothers of Italy leader, Giorgia Meloni, who could become Italy’s first female prime minister of the right-wing coalition said, “The will of the people is expressed in one way: by voting. Let’s give hope and strength back to Italy.” The Italian media felt that this was a betrayal and letting down of the people.

Instability and change of governments has been a permanent feature of Italian politics. But is not clear whether the victory of the political right in the elections as predicted will solve the economic problems of Italy. Italy too is suffering from the same problems as those that haunt the rest of Europe, and even the rest of the world: post-Covid-19 trauma and the economic woes that it caused, inflation and rising oil prices in the wake of the Russia-Ukraine war. Draghi had promised to wean away Italy’s dependence on Russian oil, but it seems a wish rather than a reachable goal, increasing dependence on West Asian oil would push oil prices up and feed the raging inflation.

Italy has for long been struggling to keep its growth rate on track, but the social unrest caused by tepid economic performance has only pushed further into economic storm raised by the Russia-Ukraine war. Perhaps Italy needed a leader like Draghi who remained calm, made no exaggerated performances and worked quietly for solutions. Italians have a tough choice to make in the elections.

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