Technocracy is back in Italy – but with a different agenda | politics

On February 13, former European Central Bank (ECB) Governor Mario Draghi was sworn in as Italy’s new prime minister. Draghi was tasked with forming a unity government following the collapse of the previous government last month.

The newly formed government has the support of a large cross-section of Italy’s parliament, with the far-right Brethren of Italy being the only parliamentary opposition.

The post-ideological populists of the Five Star Movement and the far-right Lega, both historically known for their Eurosceptic positions, are part of the governing coalition alongside the centre-left Democratic Party, the left-wing Free and Equal and the centre-right Forza Italia and several other small parties.

Draghi also benefits from Italy’s high approval ratings, and Europe’s political leaders have wholeheartedly welcomed his government.

This is not a new phenomenon. Technocrat Mario Monti was also greeted with similar sentiments when he headed an unelected cabinet in 2011 after the resignation of disgraced Prime Minister Silvio Berlusconi.

But within months of taking office, Monti was the target of harsh attacks from populist parties, and his popularity plummeted. Italian public dissatisfaction with Monti’s brand of technocratic politics grew over the years, eventually leading to the Five Star Movement and the League’s shock electoral victory and a short-lived coalition government in 2018.

Draghi undoubtedly belongs to the same technocratic class as Monti – a class that has shaped Italian and European economic policies for many decades. But that doesn’t mean their political fortunes will be the same, as Draghi’s government agenda differs markedly from Monti’s.

In line with the European Union consensus at the time, Monti pursued austerity measures and fiscal discipline, which aggravated Italy’s already sluggish economy while national debt continued to mount.

Draghi, on the other hand, seems to herald a new page in European economic and social policies that marks a departure from neoliberal orthodoxy.

Draghi’s ambitious plans

Draghi’s unity government is tasked with designing and implementing the largest stimulus package Italy has seen since the end of World War II.

Italy will receive around 210 billion euros ($254 billion) in grants and loans from Europe’s Next Generation EU coronavirus recovery fund to be spent between 2021 and 2026 on sustainable development, digitization, infrastructure projects and health, subject to reforms improving the bureaucracy, the judicial system and taxation. Like all other member states, Italy has to submit its recovery and resilience plans to the European Commission (EC) by the end of April 2021 in order to access the funds.

Draghi is following in the footsteps of the previous government and has made it clear that he will not pursue fiscal discipline and budget cuts in the midst of a pandemic. He plans to maintain and strengthen social policies to help workers keep their jobs or move to more viable sectors and to alleviate growing poverty and inequality. The new government will also use the recovery fund to create economic growth and new jobs in the areas prioritized by the EU.

Draghi already has a track record of opposing the neoliberal consensus. In 2015, under his leadership, the ECB began buying large amounts of government bonds and other financial assets from eurozone countries to inject money into their economies to boost consumption, thereby boosting job creation and economic growth.

Now, as Italian Prime Minister, he emphasizes that more European integration is needed, not less, and that the EU should be there to help member states in economic distress, rather than imposing rigid rules that further stifle economic growth and rising inequalities.

Draghi is not a socialist and his program shows that he firmly believes in market competition. In his view, government incentives and financial support should only be offered to companies that are economically viable, and those that are not should be left to their own devices. But he has also made it clear that he believes workers should be protected and that he is known as an advocate of full employment policies. His economic plans for Italy mark a sharp return to Keynesian politics after three decades of austerity and market deregulation.

European leaders know the EU faces an existential threat and needs to find a new consensus. The recovery fund consists of a mix of grants and loans, and is financed by public debt shared by all EU countries. This is a clear reversal of the policy of the European troika (EC, ECB and International Monetary Fund) which brought Greece to its knees in the early 2010s and kept the economies of heavily indebted southern European countries under the tutelage of European financial institutions. Draghi seems hopeful to take this policy change even further, and envisions Italy at the forefront of a new Europe united in solidarity.

future challenges

However, several obstacles stand in the way of Draghi’s big plans for Italy.

The anti-immigrant consensus of the Italian population, brought about by years of populist campaigns, continues to hold.

Italy and Europe’s anti-immigrant policies have brought death and suffering to thousands of migrants and refugees over the years. And these measures are not only immoral and violate basic human rights, they are also economically short-sighted.

Given Italy’s declining demographics and aging population, the country needs migrants to sustain its economy and a healthy tax base. The structural changes Draghi hopes to implement require innovation, and innovation thrives on the free movement of people and ideas. So far, the new prime minister has signaled that he will not deviate from the current consensus and called for EU-wide political efforts on the issue of returning undocumented migrants.

Another challenge for Draghi is the country’s north-south divide. In order to cope with its chronic underdevelopment, southern Italy not only needs extensive social measures, but also increased investments. However, there is a risk that the north will remain the main recipient of state investments even under the new government. League ministers in Draghi’s cabinet will no doubt do whatever they can to favor their core base of northern voters, who have always been hostile to southern demands for fairness and redistribution.

The Return of Politics

The unity government led by Draghi is likely to keep Italy afloat until the end of this crisis and kick-start a post-pandemic recovery. But this emergency government will not last beyond mid-2023, when the legislative period comes to an end and new elections are due. In such a short time, and without a direct mandate from voters, Draghi’s cabinet cannot forge the political consensus needed to support long-term sustainable and equitable economic development.

What Italy needs is a broad coalition of internationalist progressive and centrist forces with a clear vision for the country’s future and a viable plan of action that rejects anti-immigration policies and establishes equality in its multiple dimensions as a key policy goal.

Populist and far-right forces will be quick to exploit the cracks that are likely to emerge in the ruling coalition in the coming months, but for now they are fraught with internal divisions and have been significantly weakened by United’s geopolitical loss of power marked by President Joe Biden’s arrival at the White House.

Draghi’s government is giving progressive forces some time to recover and strategize ahead of the next elections. The time window is small. Progressive politicians should make the best of it.

The views expressed in this article are the author’s own and do not necessarily reflect the editorial stance of Al Jazeera.

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