X Close

How Mario Draghi broke Italy A crisis is brewing on the streets of Europe

Will Europe erupt? (ANDREAS SOLARO/AFP via Getty Images)

Will Europe erupt? (ANDREAS SOLARO/AFP via Getty Images)


July 25, 2022   8 mins

Mario Draghi’s defenestration has left the Italian — and indeed international — establishment reeling in horror. This is not surprising. When he was nominated as Italy’s prime minister at the beginning of last year, Europe’s political and economic elites welcomed his arrival as a miracle. Virtually every party in the Italian parliament — including the two formerly “populist” parties that won the elections in 2018, the Five Star Movement and the League — offered their support. The tone of the discussion was captured well by the powerful governor of the Campania region, Vincenzo De Luca (PD), who compared Draghi to “Christ” himself.

Everyone agreed: a Draghi government would be a blessing for the country, a final opportunity to redeem its sins and “make Italy great again”. Draghi, they said, simply by virtue of his “charisma”, “competence”, “intelligence” and “international clout”, would keep bond markets at bay, enact much-needed reforms, and relaunch Italy’s stagnant economy.

Alas, reality hasn’t exactly lived up to expectations: Draghi leaves behind a country in tatters. The latest European Commission macroeconomic forecast predicted that Italy will experience the slowest economic growth in the bloc next year, at just 0.9%, owing to a decline in consumer spending due to rising prices and lower business investment — a result of rising borrowing and energy costs, as well as disruptions in the supply of Russian gas.

Italy is also experiencing one of the fastest-growing inflation rates in Europe — which is currently at 8.6%, the highest level in more than three decades. Interest rates on Italian government bonds have also been steadily climbing ever since Draghi came to power, rising four-fold under his watch; today they stand at the highest level in almost a decade.

And this “polycrisis” has taken its toll on Italian society: 5.6 million Italians — almost 10% of the population, including 1.4 million minors — currently live in absolute poverty, the highest level on record. Many of these are in work, and that number is bound to increase as real wages in Italy continue to fall at the highest pace in the bloc. Meanwhile, almost 100,000 small and medium enterprises (SMEs) are at risk of insolvency — a 2% increase compared to last year.

So much for “Super Mario”, then. Of course, one could argue that other countries are experiencing similar problems, but it would be a mistake to let Draghi off the hook. He has been one of the staunchest supporters of the measures that led to this situation, having been a driving force in pushing for tough EU sanctions against Moscow — sanctions that are crippling Europe’s economies, while leaving Russia largely unscathed.

Draghi even boasted about the bold measures adopted by Italy to wean the country off Russian gas — the result being that Italy is now the country that pays the highest wholesale electricity prices in the entire EU. The absurdity of these policies becomes apparent when we consider his attempt to reduce Italy’s dependence on Russian gas by reviving several coal-fired power plants — coal that Italy largely imports from Russia.

Worse still, Draghi did little or nothing to shield wage-earners, households and small businesses from the impact of these policies. Indeed, the few “structural” measures enacted by his government have all been aimed at promoting privatisation, liberalisation, deregulation and fiscal consolidation — such as opening up for privatisation those few public services that had remained outside of the scope of the market, further “flexibilising” labour, putting private beaches up for public tender for the first time in decades, or attempting to expand taxi services to include ride-sharing operators like Uber, sparking massive protests.

For anyone who has an inkling of Draghi’s ideology, this is hardly surprising. As I’ve argued before, Mario Draghi is the bodily incarnation of “neoliberalism”. Neither is it surprising that those policies haven’t delivered, given that the EU’s neoliberal logic, based upon privatisation, fiscal austerity and wage compression — which Draghi has played a crucial role in implementing since the early Nineties — is the main reason Italy is in such a mess to begin with. Draghi also further strengthened the EU’s stranglehold over the Italian economy by relentlessly peddling the narrative that Italy desperately needed the European Covid recovery funds to kickstart its economy, and that in order to access those funds it needed to diligently implement the reforms demanded by Brussels.

Yet in macroeconomic terms, the funds in question are a pittance, and nowhere close to what would be needed to have a meaningful impact on Italy’s economy. But they come with very strict conditionalities. This is ultimately what the EU’s Next Generation EU “recovery fund” is all about: increasing Brussels’s control over the budgetary policies of member states and strengthening the EU’s regime of technocratic and authoritarian control. And who better than Draghi could be trusted with locking such measures in place? As he himself noted, the “reform path” laid down by his government meant that “we have created the conditions for the [EU recovery] work to continue, regardless of who is [in government]” — thus ensuring that future governments wouldn’t stray from the path of righteousness.

Draghi, however, doesn’t just leave behind him a scorched economy but also a deeply fractured and divided society. He is the man responsible for devising the most punitive, discriminatory and segregational mass vaccination policies in the West, which not only excluded millions of unvaccinated people — including children — from social life, by extending vaccine passports to practically all public spaces, but also restricted many people from working. He also helped make the unvaccinated the target of institutionally sanctioned hate speech, such as when he infamously claimed: “You don’t get vaccinated, you get sick, you die. Or you kill.”

All this might offer an indication of why a recent poll showed that 50% of Italians weren’t happy with the government’s work. And yet, in spite of these rather unimpressive results, when Draghi initially announced his intention to resign, the Italian establishment went into an apoplectic fit. In what will go down in history as one of the most pathetic demonstrations of the sycophantic conformism of Italian society, almost every professional category you can think of rushed to launch their own appeal begging Draghi to stay on — not only wealthy businessmen, as was to be expected, but also doctors, pharmacists, nurses, mayors, university deans, NGOs, progressive intellectuals and even the CGIL, the country’s largest union.

Even more pitiably, the Italian media gave massive coverage to several “pro-Draghi demonstrations” — numbering not more than a few dozen people. Perhaps most comically, one of the country’s largest news agencies, Adnkronos, even spoke of how several homeless people had come out to show their support for Draghi. One of these was quoted saying: “Draghi is making the difference. Italy has regained prestige and credibility thanks to him. As a homeless person I can testify to the fact that there’s a greater attention to us now and that’s thanks to Draghi.”

The Western international establishment also threw all its weight behind Draghi. Everyone from the Financial Times to the Guardian to the EU Commissioner for Economy Paolo Gentiloni came out to explain what a tragedy losing Draghi would be for Italy — and indeed for Europe as a whole. Gentiloni went so far as saying that “a perfect storm” would sweep over the country if Draghi were to leave; while the Guardian limited itself to instructing Italy’s MPs that Draghi “should stay for now”. The New York Times unironically claimed that Draghi’s departure would put an end to the “brief golden period” he ushered in for Italy. Talk of foreign actors meddling in Italy’s affairs.

So why, in spite of such massive pressures, did three parties effectively pull the plug on his government last week? Part of the explanation lies in the extent to which Draghi had managed to alienate parties such as the Five Star Movement and the League — refusing to engage with them on hardly any of his government’s policies, or to acknowledge even the most timid criticism. On more than one occasion, Draghi made very clear what he considered to be parliament’s role: that of rubber-stamping the decisions taken by government. This is evident also in Draghi’s abuse of the instrument of the confidence vote.

In his Senate speech last week, Draghi was even more explicit: after saying that he had decided to reconsider his resignation because “that is what the people want”, he essentially told Parliament that he was willing to stay on as premier only so long as the parties would agree not to interfere with any of the government’s future decisions. For many of those present in Parliament, the arrogance and megalomania of Draghi’s speech went a step too far — and moreover some say that Berlusconi was waiting for the right moment to avenge the time he was unseated by Draghi, in 2011, when the latter was president of the ECB.

However, one shouldn’t overstate the importance of Parliament’s anti-Draghi revolt. Ultimately, Draghi did little more than spell out an uncomfortable truth to the parties: “You have no real power, just accept it.” But that is a truth the political parties aren’t ready to accept. Ultimately, they are unwilling to face the fundamental contradiction between the country’s formal institutional architecture — that of a parliamentary democracy — and what we may call its “actually existing” institutional architecture, in which Parliament and by definition the political parties have almost no power whatsoever, because government itself, in the context of the eurozone, has little if any economic autonomy. The parties know this but are unwilling to admit it (to themselves but most importantly to voters).

This leaves them in a state of permanent cognitive dissonance, leading to what we may call “the political cycle of the external constraint”. As in “normal” countries, parties vie for consensus on the basis of different electoral platforms — and as often happens, the parties promising “change” happen to win. However, unlike in “normal” countries, the parties that get into government soon find out that they lack the “normal” instruments of economic policy necessary to really change anything in socio-economic terms. In fact, they have little choice but to go along with what Brussels and Frankfurt say, and if they don’t play ball the ECB is always ready to turn up the heat. At that point, if the government doesn’t back down, the ECB will engineer a full-blown financial crisis (think Italy in 2011 or Greece in 2015) — which usually leads the political parties to turn to EU-backed technocrats to fix a problem the EU created in the first place.

Yet even if the government yields, the growing tension between the requirements of the external constraint and the demands of citizens, which the parties lack the tools to remedy, leads them to turn to technocrats to resolve the impasse, by having them implement the measures the parties don’t want to take responsibility for. Then, at a certain point, usually as new elections approach, political parties feel the need to re-legitimise themselves in the eyes of voters and thus  put the technocratic genie back into the lamp — until the next crisis, which sets a new cycle in motion.

This is largely the story of what happened between 2018 and Draghi’s ouster, as the Five Star Movement and League went from anti-EU populism to Draghi over the course of just a few years. And the next elections will set in motion a new cycle, possibly hailed by a centre-right Giorgia Meloni-led government. But as the social and economic situation continues to worsen, these cycles are also bound to grow shorter and shorter. A future centre-right government — “populist” or not — would have little or no ability to resolve the crises left behind by Draghi. As always, the shots will be called in Brussels and Frankfurt.

With the launch of its recent Transmission Protection Instrument (TPI), the ECB has provided itself with a tool that technically allows it to do “whatever it takes” to close euro spreads, thus potentially averting future financial crises. Such intervention, however, is conditional on compliance with the EU’s fiscal framework and with the “reforms” outlined in each country’s “recovery fund” plans — already locked in place by Draghi. But these will do nothing to end the unfolding social and economic crisis; in fact, they are certain to worsen it. In other words, the next Italian government, if it wants to stay financially afloat, will have little choice but to follow the economic diktats of the EU — or else. In such a context, how long before the last remnants of democratic legitimacy in countries such as Italy break down? And what then? Ultimately, the next euro crisis is much more likely to break out on the streets of Europe than on financial markets.


Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.

battleforeurope

Join the discussion


Join like minded readers that support our journalism by becoming a paid subscriber


To join the discussion in the comments, become a paid subscriber.

Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.

Subscribe
Subscribe
Notify of
guest

72 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
Steve White
Steve White
1 year ago

As an Anglo expat, and resident of Southern Italy, a lot of this article hits home with me. Draghi has just been the latest face of the neoliberal machine that has created a rust-belt across northern Italy’s once prosperous manufacturing region. Globalism hasn’t helped Italy. It has facilitated the hollowing out of its manufacturing, and the selling off of its companies, resources and still worthwhile infrastructure to pretty much anyone with enough cash to offer.
In the US it used to be very Libertarian to be for open capital markets, but this simply served the right- and left-wing agendas to hollow out manufacturing in the West, and make China the worlds workshop.
French investors now own some of the best Italian companies. A Swiss company owns most of Italy’s regional airline Atalia. Draghi oversaw what was called a competition bill that in addition caused the taxi/uber battle basically led to the fact that when Italian owned beach side business contracts that are then more easily sold off to multi-national corporations. For example, the multi-national corporation Red-Bull purchased 12 acres of Italian coastline in Trieste for a mere 9 million Euros.
I used to generally dislike protectionist policies, but we need to see at some point they become a national sovereignty issue, a culture issue, and a threat to the future of nations. Politicians should truly have the best interest of the people of their nation in mind.
These are just a few examples, but I’d say the worst thing Draghi did was the dividing of the nation over green-passes and mRNA booster shots. A country that still has a culture, and a functional society is the real threat of the neoliberal globalists.
The latest divide is over the LGBT hate crimes law that is being pushed on the culture. This has been part of the leftist propaganda in the media that has also divided the nation. Ultimately as many of you know, once it’s a hate crime to say anything negative about LGBT, just quoting a bible about homosexuality becomes a hate crime. The end result is along with destroying the economy, is that the neoliberal West destroys cultures.It’s not that gay is allowed or tolorated, but it must be protected and promoted. Just like with BLM, it’s not enough to just not be a racist, you must be anti-racist, which means, “we tell you what to think and say and do”.
They don’t want Italian culture to be Italian, it must be improved, modernized, postmodern (and gay?). It must be part of the neoliberal monoculture. This is a threat at another level. This is what has Italexit starting to trend. Which, that would be a quite unknown future where Italy to leave the EU and the Euro, but I think we do see what the future is with staying the course, and it doesn’t look good for Italians. 

Last edited 1 year ago by Steve White
Nick Leaton
NL
Nick Leaton
1 year ago
Reply to  Steve White

The problem is political group think. So what’s the problem. It’s debt. Socialist pension debts. If you look at the Italian borrowing, its around 8% of the money owed for pensions. If you look at the deficits on the pensions, its about the same as the borrowing.
So why are the pension debts socialist? Perhaps they are capitalist. If they are capitalist then the contributions would have been invested, and the investments used to pay the pensions. However all the money was redistributed as the socialists demanded. End result the debt.
It’s that mono culture that’s the problem. It’s all driven by debts.

Saul D
Saul D
1 year ago
Reply to  Nick Leaton

I keep wondering what would happen if a lot of countries took a stance and defaulted on their debts? Not merely one or two, but almost like a debt-strike from a swathe of countries. Sri Lanka is bust. Argentina is heading that way. Add Pakistan, Turkey. Who would get hit if there was a global debt write off and refusal to pay?

Bruce V
Bruce V
1 year ago
Reply to  Saul D

It probably would not be a 1time thing. A planet wide Jubilee would start another sovereign debt cycle which would then require another Jubilee etc etc. The cycle time would start to shorten and shorten to the point where money and normal economic activity (like borrowing, investing, starting new businesses, and working as an employee) would cease to function. Sort of like drug addiction in an individual.

Martin Johnson
Martin Johnson
1 year ago
Reply to  Saul D

A cycle or two and nobody would buy the debt anymore. Then the National governments and their central banks would buy each other’s debt until the greatest Ponzi scheme in history blows up.

vladimir gorelov
vladimir gorelov
1 year ago
Reply to  Saul D

Philip II of Spain had a lifelong problem with debt and at one (or more) point tried just that – ordered his treasurer to deliberately default and stop paying interest on his sovereign debts. He quickly found that the state was unable to finance its vital needs and had to reverse and rebuilt his relationship with international financial markets, primarily the bankers of Antwerp.

Markus Mueller
Markus Mueller
1 year ago
Reply to  Nick Leaton

You cannot expect a vibrant economy when almost a quarter of the population is above 65. The natural result is debt, either on an individual or a societal level.

Steve White
SW
Steve White
1 year ago
Reply to  Nick Leaton

Debt often happens when the environment becomes too expensive to exist in. The pension issue is an issue partly because instead of having younger Italian’s working in Italy in order to help fund the retirements of those who came before, they leave to go to other countries. Why? Because there are no jobs in Italy. Because of globalism, the companies have stuff built in cheaper parts of the world, or the company gets in trouble, and gets sold off to investors in other nations. The problem is systemic, not simply pensions. Globalizing the Italian economy only made it more complex, and compounded and exacerbated problems that were already in it. 

Last edited 1 year ago by Steve White
Warren T
Warren T
1 year ago
Reply to  Steve White

It does certainly seem that we have been at this tipping point for some time now. The battle is whether we keep our countries, language and cultures or we all relinquish it for a monolithic, debased, sanitized humanoid world. I believe that most would chose the former vs. being coerced into the latter.

Mike Patterson
Mike Patterson
1 year ago
Reply to  Warren T

If most “would choose the former,” why aren’t they doing so? In Canada, we have only one pro-Canada populist party, the People’s Party of Canada, fighting against the debased, sanitized, neoliberal monoculture that the global elites are pushing, but it seems that few voters (so far) have the brains or the courage to vote for us.
While Canada still retains a handful of economic, political and cultural levers that can be used to recover our independence if we ever vote a made-in-Canada solution, it would appear that Italy is lost.

Bruce V
Bruce V
1 year ago
Reply to  Mike Patterson

Very good question. I’ve wondered the same thing. Only thing I can think of is perhaps that the comforts of peace and modern consumerism provide just enough ongoing fertile ground for a mental softness and susceptibility to the enemies guilt trips at a cultural level. From a personal standpoint I believe there’s a non-trivial spiritual component to all this as well. The mileage of others will legitimately vary.

chris sullivan
chris sullivan
1 year ago
Reply to  Bruce V

‘non trivial spiritual component’ – agreed – if an individual has not developed a spiritual/philosophical base for their lives they will be swayed by the loudest prettiest psuedo intelligent show in town……..

Roger Ledodger
Roger Ledodger
1 year ago
Reply to  Mike Patterson

Nothing is ever lost. Any rule/law/convention can be overthrown. It may take a Revolution, but Brexit was a democratic ballot box revolution in the UK. IF here it proves to have been subverted, the next one might not be confined to the ballot box.

Last edited 1 year ago by Roger Ledodger
Steve White
Steve White
1 year ago
Reply to  Warren T

I am afraid that there is no giant mass of high quality thinkers simply waiting for an opportunity to lead any Western nation towards a brighter path. A single leader, or small group of better thinkers than those who already think they are the higher quality better thinkers would simply be one voice, or a group of voices among the throng of voices vying for influence. At this point, I see nothing outside of an act of God holding back continued decline in most of the West, and it’s we the people ourselves who are the anchor providing the downward trajectory. 
Ultimately, as a Confessional Presbyterian, I have a set of universal truths that give me foundational objective standards within which to have my subjective thoughts. So though I average in many ways, I have a worldview that provides first principles that tend to lead me to successful thinking. I would argue that it is the abandoning of these things that leads others to be simply incapable of what I can see, think and say and do. It’s not simply more information, or more right information that helps me, it’s the ability to understand and discern the truth.

Last edited 1 year ago by Steve White
Jenny K
Jenny K
1 year ago
Reply to  Steve White

You could very well be talking about Canada as well.

Mike Patterson
MP
Mike Patterson
1 year ago
Reply to  Jenny K

For at least the last 20-30 years, current and former Canadian governments have been incurably addicted to globalism at any cost to Canadian industry, economy, politics, and culture.
However, Canada still retains the economic, financial, political, and legal authority/power to correct course if Canadians ever vote in the People’s Party, the only party formally committed to reducing to a minimum our presence in global institutions and withdrawing from all UN commitments, including the Global Compact on Migrations and the Paris Agreement on Climate Change, that threaten our sovereignty.

Alex A.
AA
Alex A.
1 year ago
Reply to  Mike Patterson

Mike, why do you think that the Paris Agreement threatens Canada’s sovereignty? Commitments taken under the Paris Agreement are voluntary and chosen by the Parties individually, not mandated by a central authority. Moreover, there are no penalties if a country doesn’t meet the targets it set–and this is going to be a very common occurrence. I can understand if someone doesn’t want their country to be party to an international institution or agreement, but when it comes to the Paris Agreement I can’t begin to see how it has any impact on sovereignty whatsoever. That is most certainly not the case for NAFTA/USMCA where sovereignty is indeed affected.

Roger Ledodger
Roger Ledodger
1 year ago
Reply to  Jenny K

I think Canada is done for, curiously it is a Francophile PM who did for it too.

Peter Warlock
PW
Peter Warlock
1 year ago
Reply to  Steve White

You do not understand Libertarianism… It is about sound money, property rights, and free markets, not about letting Globalist Kleptocrats rape your economy. The EU/EUR brought Italy the opposite of those things. We (any rational person over 50 years of age) saw this coming back in the 1990s.
Europe needs to stop worshipping Government – by definition an inherently inefficient, wasteful, and coercive territorial monopolist of ultimate decisionmaking and violence, controlled by globalist kleptocrats.
Just like Americans must do, Italians must take back control of their country. Unfortunately relatively more Italians are brainwashed by bad ideas and they need to feel far more pain from the effects of those ideas before they take action and stop their dependency on Gov’t—this pain will continue in the form of lower living standards and a further loss of individual liberty. At least the USA still has Florida and a second amendment (under heavy attack, for obvious reasons – A true patriot protects his country from Government!).
BTW, if you want to understand actual Libertarianism, study H.H. Hoppe & M. Rothbard, not the mass of fakes that are the literal opposite…

Last edited 1 year ago by Peter Warlock
David Sig
DS
David Sig
1 year ago
Reply to  Steve White

Again his othering comments was absolutely congruent to the hate-disease speech of the late 1930s 40s. And we all know where that led. Public health then and now was the driver of atrocities.
Draghi may have also uttered such filth as culling the elderly was an actuarial goal of his economic program.
Then it was Typhus. Today it was the virus.

Howard Gleave
Howard Gleave
1 year ago
Reply to  Steve White

That’s a lot of upvotes for good reason, Steve.

Jeremy Bray
Jeremy Bray
1 year ago

And yet Remainers want us to participate in this neo-colonial structure. Unfortunately, it is apparent from the reluctance of the Conservatives to take steps to differentiate our policies from the EU that in practice Brexit does not automatically enable Britain to escape the neo-colonial yoke easily.
Draghi seems to have been Il Duce without a fascist party to support him rather the EU Party and its fiscal black shirts.

Susan Davies
Susan Davies
1 year ago
Reply to  Jeremy Bray

Not quite: unlike Draghi, Mussolini was elected to parliament.

Jeremy Bray
JB
Jeremy Bray
1 year ago
Reply to  Susan Davies

Indeed there are many differences between Draghi and Mussolini. Mussolini was a nationalist whereas Draghi is a liberal globalist. Unlike Mussolini Draghi has not outlawed parties or imprisoned political opponents or employed violence to gain his ends. Again Draghi has not nationalised swathes of Italian industry but done nothing to prevent the acquisition of Italian industries by international conglomerates. I would certainly not press the analogy very far. Rather than Il Duce he is more a Governor or proconsul of a province.

Roger Irwin
Roger Irwin
1 year ago
Reply to  Jeremy Bray

Draghi was the official receiver from the European Central Bank.
His recovery having failed the next person to sit in the chair will be an EU regional governor…whether they like it or not.

Andrzej Wasniewski
Andrzej Wasniewski
1 year ago
Reply to  Roger Irwin

Regional governor, the role similar an NSDAP gauleiter

Fraser Bailey
Fraser Bailey
1 year ago
Reply to  Jeremy Bray

Mussolini got the trains to run on time. The same cannot be said of Draghi and the payments from Brussels.

Last edited 1 year ago by Fraser Bailey
R Wright
R Wright
1 year ago

Italy essentially now has a national government equivalent to that of a 1950s African dominion. An elected caretaker government with the strings being pulled elsewhere.

Robert HARNEIS
Robert HARNEIS
1 year ago
Reply to  R Wright

What they need is someone with the balls to tell Brussels and Berlin to F off, leave the Euro and let the chips fall where they will. It is the obvious solution to Italy’s problem for the less well off. For those with cash it is not so good but it is inevitable anyway.

Susan Davies
SD
Susan Davies
1 year ago

The new “Italexit” party (led by a former M5S senator) is polling at about 2.5%. I wonder if that will be the next one to surge, once the cycle described so clearly and concisely in this article consumes the incoming Meloni government.
Regardless, I fear that there is no escape from the Euro trap for Italy. The power to dissolve it lies in the hands of Germany alone, and things would have to get extremely bad for the political will to do that to arise.

Norman Powers
Norman Powers
1 year ago

As always, there is fear of spelling out the actual reason Italy is so dependent on the EU. Not some shadowy neoliberal conspiracy but simply that the Italian government spends far too much money for the size of its tax base. Italians can have both the Euro and also a functioning Parliamentary democracy but to get there it has to severely shrink its government. Only when tax take > spending and thus paying down the deficit, will Italian governments not serve at the whim of the ECB.
Unfortunately the power to print money is also the power to buy voters, if they allow it. For as long as there are people voting in left wing governments with promises of jam today, the ECB will always be the ultimate owner of the population.

Roger Irwin
RI
Roger Irwin
1 year ago
Reply to  Norman Powers

Italians do tend to look on the Euro as manna from heaven. And after all, it has allowed them to run up even greater debts by virtue of having the ECB as a guarantor.
But of course all that money comes at a cost. The Americans would say they’ve ‘sold the farm’. Italians don’t seem to have realised this yet.
A couple of years ago an opinion poll was carried out. It asked various interlinked questions about Italy an the EU. The net result was that 2/3 of Italians would like to leave the EU, but 3/4 wanted to stay in the Euro.
That speaks volumes both about how little they understand about the EU and the Euro, but also what they are interested in.

Fraser Bailey
FB
Fraser Bailey
1 year ago
Reply to  Roger Irwin

Yes, the results of that survey were among the funniest things I have ever read. As I said on Unherd at the time, it provided clear evidence that the vast majority of Italians are as dumb as they are lunatic.

Warren T
Warren T
1 year ago
Reply to  Fraser Bailey

I don’t thing Italians have a monopoly on ignorance. Ignorance is a perpetual global pandemic.

Roger Inkpen
RI
Roger Inkpen
1 year ago
Reply to  Norman Powers

Yes, I’m all for a bit of Brussels bashing, but this article misses the point. Italians don’t trust their own government to run Italy, which is precisely why they were prepared to give power away to Brussels.

Rasmus Fogh
Rasmus Fogh
1 year ago
Reply to  Roger Inkpen

Yes. Exactly so. And, looking at their politicians, can you blame them?
That might also be why technocrat governments are so common and indeed so popular (including Draghi). People expect the technocrats to be both more competent, more honest, and more interested in actually dealing with the country’s problems instead of just increasing their own power. Again, would you really say that the politicians Craxi, Renzi or Berlusconi were superior to the technocrats, Prodi, Monti, or Draghi?

Last edited 1 year ago by Rasmus Fogh
Roger Inkpen
Roger Inkpen
1 year ago
Reply to  Rasmus Fogh

Yes, thanks for correcting me – it’s the politicians Italians don’t trust, rather than any particular govt.

Steven
Steven
1 year ago
Reply to  Roger Inkpen

@Roger Inkpen
You have hit hit the proverbial ‘nail on the head’.
In Italy there is zero respect for authority whether it be municipal or the Police and especially the Government whom they consider to be absolutely corrupt from top to bottom.
They have seen over the past 50 years the sheer corruption of politicians and dare I say it here (and perhaps provoke a backlash), that was why ‘il cavaliere Berlusco’ was well liked because he was already an extremely rich businessman and therefore did not need to rob the people like these thieving self serving politicians.
As in America, the left and the Judiciary (the same at the end of the day) hated him and wished to drag him through continuous legal challenges to ‘tie him up’ constantly and divert his energies……… Now, think about it, where else do you have a similar scenario playing out with a very similar character who saw through all the corruption and BS of the political left????

Anna Bramwell
Anna Bramwell
1 year ago
Reply to  Norman Powers

The 2018 budget showed a primary surplus, and a 2.4% deficit when servicing the debt was allowed for. A pretty successful result of Monti, Fornera,and the PD. But as Di Maio and Salvini said, successful operation, pity the patient died Their budget therefore proposed growth measures such as relief for small businesses ( VAT cut to 5% for small and start up businesses), reduced tax penalties for bringing money back into Italy, and a new pension system designed to cure the problem of the 400000 pensioners who retrospectively lost their pensions under Monti. The budget was predicted to increase the deficit by barely one percentage point.
Pierre Moscovici, the EU Commissioner, was sent to Italy to explain that this wasn’t acceptable . Growth stimulus would not reduce the debt. Other countries’ debt heavy budgets were allowed to pass. The EU was afraid that this odd combination of social welfare and Thatcherite capitalism might succeed.

Norman Powers
NP
Norman Powers
1 year ago
Reply to  Anna Bramwell

Primary surpluses don’t matter, and that was years ago. Then the Italians panicked and decided lockdowns were a brilliant idea (gee, thanks guys), that blew a massive hole in their already very high debt/gdp ratio.
Italy was not “dying” in 2018. It’s exactly that sort of rhetoric that is why they’ve got themselves into this situation in the first place. Obviously Italy isn’t special in running permanent deficits, but it also isn’t some universal rule of life. Plenty of governments have managed to run balanced budgets or even surpluses.
Note that none of the things you said they did to create growth involved reducing the size of the government, and most of them are simply cutting taxes without also cutting spending so not surprisingly it hasn’t helped them get a grip on their debt. To actually boost growth they need to slash the size of their government dramatically, in order to free up the sums needed to replenish their pension funds and avoid relying on ECB money printing. There’s just no other way to do it.

Mashie Niblick
Mashie Niblick
1 year ago

“Everyone from the Financial Times to the Guardian …”
There is no difference between these two rags.
I stopped reading at this point.

Roger Irwin
Roger Irwin
1 year ago

The EU has attempted to transform Italy into a tourist destination whilst leaving its industry to decline. The sums don’t add up.
But Italy is in the Euro. With the massive Euro debts it has accumulated it has no way out; if it left the EU it would be instantly bankrupt.
To all intents and purposes it’s no longer a sovereign state. It would be better described as an autonomous region of the EU. The big problem is that most Italians don’t realise that.
But don’t put the blame on Draghi; Italy had long ago let it’s industry go, and the latest round of debt, brought on by Covid, was shepherded in by his predecessor, Conte.
Draghi was just doing the best he could under difficult circumstances.
The idea that Italy could have been better off not supporting Ukraine is an idea promoted by Putin and his allies as a way of splitting the West. The reality is far different; Italy has close links with Eastern Europe and they are the countries pushing most for supporting Ukraine. And with good reason, if Putin wins they will likely be next.
At the end of the day Italy can find energy, it has just increased supplies from northern Africa. Nor is it stupid to restart coal. Whilst Italy has used Russian coal in the past, there are large resources of coal available within the EU. Countries such as Germany and Poland are pushing production to the max.
Draghi’s real problem is that the Italians do not want to face up to the fact that the EU has ruined their country. And as they can’t leave then they have to concentrate on wrestling control of the EU itself. With current political debate entirely centred on Rome and its parliament with no powers, that’s looking difficult.

David Watts
David Watts
1 year ago
Reply to  Roger Irwin

Yes you are right there, it is looking difficult VERY VERY DIFFICULT. Brussels and Frankfurt have got them by the Bo ax. It is only a matter of time, they will do what is being demanded eventually, as the other option will be far to painful. But it wasn’t in the original script was it?

willy Daglish
WD
willy Daglish
1 year ago

Italy was “broken” by joining the Euro. Just like the rest of the “ClubMed” countries
What is happening now was forecast at the time of the European Commission first inventing the currency. Nothing will or can change for the better without first escaping the “poor must subsidise the rich” common currency.

Last edited 1 year ago by willy Daglish
Nicky Samengo-Turner
Nicky Samengo-Turner
1 year ago
Reply to  willy Daglish

as a ” half Italian’ who lived in Italy during the summers of the late 1960s and 1970s, in my late teens and early 20s, and when Britain was an Afghan coated, long haired hippie leftist mess, I loved the Italy of the elegant, stylish girls, and the men in their cashmere sweaters, monogrammed hand made shirts and big motor cycles!

Chauncey Gardiner
Chauncey Gardiner
1 year ago

Very nice commentaries out here, everyone. Well done.
So, yes. Italians, as a whole, might like the idea of leaving the EU but not the Euro, because the Euro enabled them to do what it has enabled the Greeks and others to do: rack up more debt at lower rates than would have otherwise been available. No one in the Eurozone, it seems, took the opportunity to clean up their books.
Ah, well. Leaving the EU/Euro apparatus would really hurt. So, they won’t. Impotent governments will come and go, and that it that.

David Watts
David Watts
1 year ago

The Euro is not a currency it is a very addictive DRUG being cleverly administered by Brussels.

Paolo Mantovani
Paolo Mantovani
1 year ago

The idea that ‘Draghi broke Italy’ is at least as flawed as its opposite ‘Draghi will save Italy’.
Italy has been in a chronic social, economic, cultural decline for decades, starting well before the euro. No news there. Draghi was recently ‘called in’ (rightly or wrongly; I think wrongly) on a temporary basis to put some stitches in a complicated moment – mostly, to secure the EU moneys of the Recovery Fund – which he, more or less, did. Any different expectation was and is a unicorn, and the man was always pretty vocal about the nature and limits of his mandate.
Aside of the cherry picking and the questionable causal inferences, there are also quite a few flat inaccuracies in this article. For instance, the mad, divisive, pseudoscientific (etc.) Italian policies on covid were cooked by the previous government (and are, incidentally, a likelier cause than Draghi of, say, current high inflation). Draghi arrived at the tail of the pandemic and simply decided not to reverse some such policies (including, true, the hideous ones regarding vaccine passports), also becuase they would have naturally expired anyway in a matter of one or two months. Believe it or not, though, relative to the mad context of covid Italy, Draghi was the ‘opener’ – the one who opened up the country, who ended the formal state of emergency and stood still to repeated calls for more closures and more madness.
Anyway, no worries, the wisdom of the peoples will soon pronounce itself. Watch closely.

Arkadian X
Arkadian X
1 year ago

But it was Draghi who introduced the super duper extra strong green pass. His tenure wasn’t quite at the tail end of covid.

Paolo Mantovani
Paolo Mantovani
1 year ago
Reply to  Arkadian X

You’re right on the super green pass and I wrote something incorrect. Arguably, Draghi’s main mistake as PM (aside of accepting the job in the first place) was to keep the previous minister of health (Speranza) with his chief adviser (Ricciardi, a zero covid guru). But, again, his mandate was limited in scope and time, with two main goals: secure the moneys of the EU Recovery Fund and organise the vaccination campaign (the latter being one of the many spectacular failures of the previous gorvernment). More or less, and relative to the Italian context, it’s job done on both accounts.
Draghi’s tenure did begin at the tail end of the pandemic phase of covid – February 13th 2021, tail of the second big wave and well into vaccination campaign (in Italy the worst part of that wave was October-December).
I’m no fan of technocratic grovernments and I’m unconfortable having to defend Draghi’s legacy as PM. Surely, the very fact that Draghi was called for the job out of nowhere (and even considered as some sort of Jesus the saviour by many) is in itself a sign of a well broken country. The idea that Draghi broke it in his year or so of government is preposterous and this article is click bait for anti-elite whateverism.

Last edited 1 year ago by Paolo Mantovani
Nicky Samengo-Turner
NS
Nicky Samengo-Turner
1 year ago

Italy thrived to a great extent under the financial power of the Mediobanca run ” salotto buono” and its Generali, Agnelli, Pirelli, Lazard and later Benetton and other allies, which in its dying days included Ennio Dorris and Berlusconi.

The government bond markets had volume, and currency and price volatility, and therefore a big derivatives market support base, so against all purist economist rules actually worked… the advent of the Euro put paid to this.

Italy is two countries- a voracious consumer of cash, the state… and a low tax country, because people spend and invest instead of paying taxes to be consumed by a corrupt state and local authorities in wholesale waste.

The new ” solution”? .. God knows, but bits of days of yore worked in the days of the Agnelli!

Now all the grandchildren of the Salotto Buono families are bearded leftists who have been pierced in the heart and brain by the National Socialist woke trident, of Global warming, lgbt and racism, which as everywhere else in the world does not reflect the interest and concerns of 99 pc of any electorate, but is peddled by the war equivalent of ” air power superiority”…. the media.

Roger Ledodger
Roger Ledodger
1 year ago

The problem that ‘air power superiority’ had is rapidly evaporating, rather like the Russian Superiority in Afghanistan when the US started supplying stingers. The MSM is increasingly mistrusted and it is getting to the point that even IF they speak the truth, most of the Demos no longer believe anything they say.

James Kirk
James Kirk
1 year ago

I haven’t been for a while but I seem to remember two Italys. The North with their industry, fashion, opera and middle class dominating the culture and the South, poorer with strong family based agriculture. They used to say their black market exceeded that of the economy. No reason to think it’s changed much. I doubt the Cosa Nostra disappeared either. I’d have thought Italexit was highly likely with all the divided opinions that brings. They don’t have many friends beyond family connections. They declared war on us, or we them. Is that forgotten?

Roger Irwin
Roger Irwin
1 year ago
Reply to  James Kirk

The industry has gone from the North.
Cosa Nostra, these days far more business savvy, has moved in to fill the vacuum.

CHARLES STANHOPE
CS
CHARLES STANHOPE
1 year ago

No surprise here, as Metternich said: Italy is “only a geographical expression,”

Mike Doyle
MD
Mike Doyle
1 year ago

The Russian economy is predicted to contract by between 5% and 15% so the sanctions are truly biting.

Nell Clover
Nell Clover
1 year ago
Reply to  Mike Doyle

*Was* predicted to contract by 15%, which was the assumption when sanctions were applied. The Rouble’s recovery, very high oil receipts and lower inflation than expected have seen that forecast improved and the consensus seems to be a contraction of 3-5% (both dollar and ppp terms) this year. If that forecast pans out, for every $1 reduction in Russian GDP the West has reduced its GDP by North of $17.

In some respects, the sanctions we are applying now are working much like Napoleon’s Continental System did against the UK. They’re shielding Russian industry from high value European (and US) competition whilst still it has access to low value commodities and light manufacturing goods (from Asia). The Napoleonic blockade was ill thought out and British industry quickly adapted to fill the gaps.

Despite the original sanctions conditions being met, the sanctions have not yielded the expected result.

Alex A.
AA
Alex A.
1 year ago
Reply to  Nell Clover

Well, that’s a bit of a cold shower.

Matt M
Matt M
1 year ago
Reply to  Mike Doyle

.

Last edited 1 year ago by Matt M
Thomas Fazi
TF
Thomas Fazi
1 year ago
Reply to  Mike Doyle
Paolo Mantovani
PM
Paolo Mantovani
1 year ago
Reply to  Thomas Fazi

Seems to me it’s a bit early to say. It was always going to be a medium-to-long term game – which of course has its costs (eureka!)

Last edited 1 year ago by Paolo Mantovani
Roger Ledodger
Roger Ledodger
1 year ago
Reply to  Mike Doyle

If that is true, how come the Russian Central bank has been taking steps to devalue the rouble in the last few weeks? It had grown too strong on the basis of it being a ‘resource backed currency’ Even the EU is paying for gas and oil in roubles, albeit by some rather roundabout means to save them from being seen to break the sanctions rules.

Rob Britton
Rob Britton
1 year ago

“How Mario Draghi broke Italy”

Italy was broken long before Draghi took charge.

Christine Thomas
Christine Thomas
1 year ago

Sounds familiar somehow! With UK in or out of the UK.

Maureen Finucane
MF
Maureen Finucane
1 year ago

Five Star is a clown show. Until last year they controlled Rome and the garbage went uncollected and the city was filthy. They got the boot and the city has vastly improved. I’m a frequent visitor as a relative lives there.

David Sig
David Sig
1 year ago

Why is it so difficult to state the obvious? This vicious tyrant did to the elderly (as the author points out) exclusion and othering. The only reason he did not implement detainment-concentration camps was out of a EU fear of being compared to the 1940s.
In truth IL Duce didn’t savage his entire population (except towards the end against Jewish citizens under German occupation which does not give Draghi a pass) what this despicable brute did. And IL Duce for all his faults was not a complete traitor as Draghi was and still is.
Shouldn’t Draghi be facing the severest criminal caution?
Or is Europe the same as the time of James II. When traitors prosper none dare call it treason. A travesty that he will never face justice
The elderly “They are not a part of our society”
Economics are important. Tyrants and othering are even worse crimes.

Francesco Loredan
FL
Francesco Loredan
1 year ago

This the best analysis I have read on Draghi’s achievements. I can only be supportive of the conclusions provided. Draghi has been divisive, he has not shown any ability to bridge the increasing gap in Italy between the haves and the have nots. He clearly has the support of the Italian nomenclatura but Italy needs to re-create a social construct where all parts of the society feel safe, have prospects and in which there is also social mobility. It is true that he has been in power only for a short period of time, but there have been no signs from his actions that he wished to address the real problems of the Italian society. He applied a technocratic approach, totally a aligned with EU and NATO guidelines, with a completely uncritical approach to the Ukraine situation and to Covid crisis. He will not be remembered for what he did but for what he did not do.

Howard Gleave
HG
Howard Gleave
1 year ago

“This is ultimately what the EU’s Next Generation EU “recovery fund” is all about: increasing Brussels’s control over the budgetary policies of member states and strengthening the EU’s regime of technocratic and authoritarian control”.

Italy under Draghi has been an anti democratic EU puppet state. It perfectly encapsulates why I campaigned so hard for Brexit and have no regrets. Work in progress? Certainly. But the Treaty of Rome wasn’t unbuilt in a day.

Rasmus Fogh
RF
Rasmus Fogh
1 year ago

Ah well. 100% Anti-EU, anti-COVID-measures conspiracy theories. Do you actually understand anything about what happens in Italy? Or care? Or do you just push the button to run an anti-EU spiel on top of whatever the latest headlines happen to say?

Not that I am a great fan of Draghi’s, but there is nothing to stop Italian politicians – or voters – from ditching the Euro, no longer borrowing money from German banks, no longer relying on Brussels to deal with financial crisis, and fall back entirely on their own resources and the ideas and talent of their own politicians. For some reason the Italian electorate is not really eager to do that. Maybe they think that their politicians are too clueless and self-interested to make a good job of it? Or even (as the UK has proved) that getting rid of Brussels does not by itself solve any of their problems?

David Watts
DW
David Watts
1 year ago
Reply to  Rasmus Fogh

Rasmus I am being honest, you are talking rubbish. What do you mean there is nothing stopping Politicians or Voters ditching the Euro. Are you out of your mind. Ditching the Euro is an impossibility. It will never happen, why do you think Mario Draghi when he copied Gordon Brown’s words of 2008 (I WILL DO WHATEVER IT TAKES) in 2012 said that. Very simple the Euro was in extreme danger of collapse, if the Euro collapsed so would the EU. IT would be Brussels worst ever nightmare and it is not ever going to be allowed to happen. So as in the normal Brussels procedure they turn every crisis into an opportunistic event. Yes they had to turn the printing presses on at full speed for a very long time (10 Trillion of it) but in doing so they rescued the Euro but that was only a “Knock on effect” of there true intention, locking all of these countries in to an unescapable future with the EU where eventually all power will be centred on Brussels (The United States of Europe) was there ultimate goal which they have basically achieved, not quite but as good as. Round two of this procedure has been the “EU Recovery Fund” hence far more individual state powers being signed over to Brussels. Rasmus maybe you see things different to this? but Italy could not leave the Euro they are locked in for life. The Italian Government does not actually hold any power now at all anyway.

Rasmus Fogh
Rasmus Fogh
1 year ago
Reply to  David Watts

You have a very good point here. There is a layer of politicians and apparachiks who are indeed trying to move towards some kind of superstate (‘ever closer union’), and taking opportunities as they come to push measures that they could not get past unwilling publics – or nations – otherwise. And yes, I do find it quite tiresome.
Still, Italy was not conquered, they voted in because they wanted to be in, in part because many rather liked the idea to take decisions away from the venal lot in Rome, in part just because they did not fancy their future on their own. Nor will there be an invasion if they decide to leave the Euro, or default on their debts. Argentina did, and the country is still independent. Italy would be quite a bit worse off if they did, of course, but then so will Britain be, and that did not stop Brexit. If Italy wants the cheaper borrowing, the support of the ECB, good relationships and open markets from their neighbours – and they do – Italy has to accept the cost. We live in the real world, where you cannot blame some random bogeyman if you do not like the available choices.

Last edited 1 year ago by Rasmus Fogh
Roger Ledodger
RL
Roger Ledodger
1 year ago
Reply to  Rasmus Fogh

This ‘self-interest’ in being part of the Euro is not new when it comes to Currency Unions, ironically it is also the thing that brings them crashing down, because someone somewhere in the Union has to suffer to create the advantages the self-interested exploit. The question is ‘what happens when the crunch comes’ and the exploited have had enough?
Well the Greeks discovered that the Germans weren’t going to put up with their self-interested exploitation forever AND it was Germany & its banks that were saved when Greece was ‘immolated’ (as the IMF later admitted) on the Altar of the Euro.
The general consensus is that Italy is too big to be saved (ie When the Germans get fed up and want their money back, Italy is too big to be punished like Greece – tho’ that remains to be seen) IF that is so, then that’s when the German’s panic over what exactly Target 2 is, AND whether it really is what their economists claim – interest free, collateral free loans to the rest of the Eurozone states, particularly Southern Europe. Then the probability is, like every one of the other currency unions, it will collapse. The EU with it, AND if the German economists are right, then the fate of the Bundesbank is in the hands of Italy’s leaders – and their decision about IF they pay back their Target 2 loans and if so , in what currency.