Draghi will no longer come to Italy’s rescue

By Maria Tadeo

Italian politics is strikingly similar to South American soap operas, filled with episodes of unrequited love and multiple divorces. Things reach a fever pitch before an unexpected turn of events comes to set everything right by a machine god. This is the climax in ancient dramas, when a god appears on the scene to provide a solution.

Italy’s left, led by the Democratic Party, is now hoping for such a moment after its election strategy was upended by the sudden departure of a centrist ally, just four days after agreeing to join forces against the rising right. But who will play God? The party is betting on the holy aura of Mario Draghi.

Led by Enrico Letta, the Democratic Party is still reeling from the weekend collapse of its alliance with centrist Carlo Calenda. If he can form a government after September’s election, Letta says he will continue Draghi’s policies and “take revenge” for the former central banker’s sudden and rude departure. He accuses the right of undermining Draghi and betraying Italy’s interests by leading the country to early elections.

The problem; Draghi himself has no intention of playing the savior in this drama. Those still hoping that the man who saved the euro will wade into the thick of the campaign to influence the outcome are sure to be disappointed. He won’t do it.

Throughout his tenure, Draghi has made it clear that he was responding to a specific mandate, for which he was appointed and not elected. He was given a mission by the President of the Republic, the aim of which was to steer Italy’s recovery plan from the coronavirus pandemic in the right direction, to receive funding from the European Union in exchange for certain reforms.

This was a manager’s job, though, not a politician’s, and Draghi showed no appetite for the political expediency required to retain power in Rome. Considering the events of the past two months, who can blame him. He made his historic reputation by saving the euro in 2012. He doesn’t want his name tarnished now. Nor does he want his name exploited in the ongoing electoral game.

The Democratic Party will realize that it is impossible to follow Draghi’s policy without Draghi. Bragging about pursuing the Draghi agenda without the technocrat’s involvement will be a hard sell. Draghi’s job is done and the politicians know it. Giorgia Meloni, head of Italy’s Brotherhood and front-runner, may be short on details about almost everything, but she is the loudest voice crying out for more freedom and less state. For Leta’s party to be persuasive, it needs to do more than just repeat Draghi, Draghi, Draghi.

Leta had the good sense to seek a broad coalition from centrists to the hard core of the left. But the so-called campo largo – roughly translated as wide field – demanded so much flexibility from everyone that it ended up reaching its limits. And indeed this happened. Calenda scrapped the deal on the grounds that some members of the alliance were just as populist as the Right and even had a history of voting against the Draghi government.

Now there is talk of a Terzo Polo, a group of centrists who could come together to offer voters a third option, which sounds complicated. It is also ineffective. The more splits there are between the centre-left forces, the better for Meloni, who is rejoicing after recent events. Polls show that Leta’s Democratic Party will fight on an equal footing with Meloni’s Brothers. But Meloni has a viable coalition. The center-left does not have an alliance that can defeat the right led by Meloni. Their numbers just don’t add up.

All this might be fun, but Italian life after Draghi won’t be much fun. Moody’s reminded investors – and Rome – of the cost of political unrest when it downgraded the country’s outlook to negative following Draghi’s departure. Gone is the famous “Draghi put”, i.e. Draghi’s ability to calm the markets.

The few weeks before the elections are a lifetime in Italian politics. And anything can happen. But there is now a greater chance that a right-wing government will take power in the autumn. Leta and the Democratic Party should waste no time chasing Draghi’s ghost.