April 26, 2021 - 5:00pm
Mario Draghi was sworn in as Italy’s new prime minister in mid-February. Ever since both the local and international press have been gripped by an irrepressible enthusiasm for the former president of the European Central Bank (ECB).
Recent examples of unbridled “Draghimania” include these articles in The New York Times and Financial Times. The arguments are more or less the same: thanks to Draghi, Italy has gone from being “the EU’s juvenile delinquent” to being “the model European”.
According to his cheerleaders in the press, Draghi is finally spearheading “reforms” that are allegedly “much-needed” by Italy — his “reform plan” recently submitted to Brussels as a condition for accessing the funds from the EU’s much-touted “recovery fund”, the European Recovery and Resilience Facility (RRF), has been extolled by Bloomberg as “a once-in-a-lifetime opportunity [to] modernise a dysfunctional state”.
Draghi is credited for allegedly “shaking up” the EU on its (notoriously slow and chaos-ridden) vaccine rollout, following his decision to seize a shipment of vaccines destined for Australia, which is said to have pushed the European Union into “authoris[ing] even broader and harsher measures to curb exports of Covid-19 vaccines badly needed in Europe”.
He has also been praised for leading the way on fiscal policy in Europe, by announcing “Europe’s biggest stimulus plan”, which is purportedly “helping to drive the bloc more into line with a push across the advanced world to prioritise extraordinary stimulus as the central response by governments to an exceptional economic crisis”.
We are being told that Mario Draghi has single-handedly kickstarted a revolution not only in Italy but across the entire EU. And all in the course of a few months. But do any of these grand claims stand the test of basic scrutiny?
Has Italy lacked “liberalising reforms” in recent decades? No — this is an old trope, particularly popular north of the Alps. The data “shows that Italy introduced liberalising reforms more intensely than most other countries, especially from 1992 on, more than Germany and, especially, France”. Just over the past decade, Italy’s “ease of doing business” ranking, according to the World Bank, has jumped from the 78th to the 58th position, a 20-notch improvement — with no noticeable impact on growth. If anything, the introduction of these reforms, as I explain here, has coincided with the beginning of the stagnation of the Italy’s economy.
As for the notion that Draghi has “shaken up” the EU’s vaccine rollout, it’s not clear what this refers to. The EU continues to lag dramatically behind other advanced (and even many non-advanced) nations in terms of vaccine coverage, and its procurement strategy faces one hurdle after another. Furthermore, regardless of one’s opinion on the issue, the EU has not implemented a vaccine export ban: the latest data shows that the European Union continues to export more vaccines than it administers.
Finally, Draghi’s “massive” stimulus plan, upon closer inspection, is much less impressive that one may think. Draghi has announced that he will push the government’s deficit to 11.8 per cent of GDP. Now, while that may sound like a lot, one should keep in mind that last year’s deficit was 10.8 per cent of GDP. So we are in the presence of a one-per-cent increase in the deficit, at best. This is not much of a stimulus.
Draghi is on track to becoming a Macron 2.0: at the time of his election, the French leader was eulogised by the mainstream media as a great modernising, pro-EU reformer as well; today he has one of the lowest approval ratings in Europe. You can gloss over reality as much as you like, but sooner or later it catches up with you.
Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.
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SubscribeIt’s hard to imagine a truly reformist leader in any EU country. The whole block is tied up in so much red tape emanating from Brussels, I doubt any one person or administration can free themselves from all that bureaucracy. The most successful leader in that regard is probably Orban in Hungary and he’s basically ignoring EU law and regulations when it suits him.
Believe me, we don’t believe the media hype. We are not that stupid, won’t get fooled again etc. And, by the way, the seized vaccines were, apparently, destined for Belgium, not Australia. And, even if they were destined for Australia, in what sense is it appropriate that someone seizes goods that have bought and paid for by somebody else. Draghi is a snake, and a very nasty one, just like all those in Brussels.
“Believe me, we don’t believe the media hype” I hope you were wearing your mask as you typed that.
There was a batch of vaccine which was stopped on its way to Australia from Italy – I think 250,000 doses of Astra Zeneca. There was then a raid at a plant in Italy where the supposed “secret stash” of AZ was found…cue fevered accusations of vaccines being “hidden” etc. Turned out a portion of these “hidden” vaccines were destined for somewhere in the EU (possibly Belgium, I didn’t keep up), the rest for countries outside the EU as part of COVAX. AZ said they were there waiting for quality control. Not sure if I believe that but the whole thing died down again fairly quickly.
Draghi is a dyed-in-the-wool “status-quo”-ist… an alumnus of Goldmans like so many of our global leaders. He will deliver nothing new.
A new depression will be delivered soon enough. (Bloomberg is just the Biden Cheerleader, they are the ‘sheep whisperer’ printed to keep you all calm as the elites prepare to shave off your fleeces before you can run for the hills.)
9/2019, “European Central Bank President Mario Draghi said the Governing Council should be open to ideas like MMT”
MMT, before covid even hit, sounds like Italy is going for modern day Alchemy of turning ones and zeros into gold. Oh, well, it is what USA is doing.
What annoys me about the breathless commentary on Draghi is that all journalists seem to be praising him for taking “a big risk”. Having read this article, I am not even sure whether the risk he is taking is as big as the media makes it sound. However, it is going to take Italy’s debt into never-seen-before territory…which makes the prospect of QE being tapered/interest rates rising that bit hairier.
Funny how when Draghi takes this risk, it is “fabulous”, “the work of a maverick”, “revolutionary” and generally fawned all over. When Boris takes a risk, it is “reckless” or “populist”…or, if the risk turns into a win (see vaccine campaign), attacked at every turn.
Utterly pathetic and completely transparent.
Poor Italy deserves better. Another Macron, indeed.
Draghi is highly overrated. As Italian minister of Finance he did not show any real effort in solving his country’s bank problems. Draghi for instance knew that Banca Monte dei Paschi di Siena, had a hole of almost 400 million. But did not act upon this. His so called quest to save the Euro by buying all the Italian debt and company debt was just to minimize the yield difference between the Italy’s 10 years yield and that of the Northern European countries. So that Germany could continu his cheap exports to these countries. But by doing so destroying pensions and money held at saving accounts. His latest move is just more of the same unimaginative order. Throwing good money, this time tax money paid by citizens in the Northern parts of Europe, after bad money. Of course it suits the federalist EU civil servants who would love to see their great EU federation been taken on this balloon ride. But just what this policy of Draghi had shown is that it will not solve the real underlying problems.
Maybe the reason for the enthusiasm for Draghi is that he is the best of the poor options available ? Can the writer suggest a better alternative ?
Maybe one that was elected not appointed by the EU?
The difference is Macron was elected, Draghi was appointed. In the unlikely event of a meaningful election in Italy and him standing, if nobody voted for him the ECB would just choose somebody worse, for the Italians that is.