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Italy’s “National Unity” Government Is the Cutting Edge of Post-Democratic Governance

Mario Draghi's new Italian government has been hailed for uniting all political forces from the center-left to the hard-right Lega. Yet the adulation of the former European Central Bank chief as a "national savior" continues a trend elevating technocratic economic decisions above democratic choice — and it's working-class Italians who'll suffer.

Mario Draghi speaks to the media following a meeting of the ECB governing board in Frankfurt am Main, 2019. (Sean Gallup / Getty Images)

Never elected to any public office, the new prime minister was keen to assure ordinary Italians he had their interests at heart. A former European Commission official, he insisted his aim was to rebuild trust between citizens and their institutions — and overcome the troubling social breakdown driven by soaring unemployment.

Ahead of his first confidence vote in the Senate, the new premier promised to raise Italy out of the crisis by cleaning up the public finances, fighting tax evasion, ensuring social cohesion, and returning the economy to sustainable growth. The media near-unanimously praised the technocrat for saving Italy from the mess left by a bankrupt political class: amidst such adulation, it was no surprise he began his premiership with 84 percent public approval ratings.

This all happened in fall 2011, when former Goldman Sachs advisor Mario Monti became Italian prime minister. His now-infamous government went on to introduce eye-watering austerity which pushed up unemployment and presided over a 3 percent fall in GDP. Such was this “providential” figure’s collapse, that when Monti ran in the general election fifteen months after his appointment, only one in ten voters backed his party.

Such an experience might, at least, have served as a caution to pundits claiming that the 2021 version of technocratic government — this time led by former European Central Bank chief Mario Draghi — is really going to “save Italy.” Yes, new Prime Minister Draghi enjoys high public approval (at equal levels to Monti), broad parliamentary support and fawning media coverage across almost all mainstream outlets. But the cheerleading by business lobby Confindustria as well as seasoned neoliberal hawks across Europe also tells us something about the kind of “reforms” he will administer.

Without doubt, Draghi’s incoming government is not simply identical to the previous technocratic administration under Monti in 2011-13. In particular, the slackening of European budget deficit limits during the post-pandemic crisis will mean less immediate pressure to slash overall spending. In a Financial Times column last March Draghi recognized the likelihood of enduring high public debt, implying a change of tone from the European response to the 2008 crisis, in which he himself was a leading proponent of devastating cuts and privatizations.

The broad political support for his administration — with fifteen “political” ministers drawn variously from the Five Star Movement, the center-left, Silvio Berlusconi’s Forza Italia, and Matteo Salvini’s hard-right Lega, along with eight unelected technocrats — owes much to the European Recovery Fund money he will have at hand. Yet both Draghi’s record, and his cabinet’s reliance on various Berlusconi-era ghouls and bank administrators, are good reason to question the media boosterism about Italy’s “savior” and his government “of the best.”

Keynesian?

Indeed, for all of Draghi’s “institutional profile” and talk of having to live with high public debt, it does not take much to dismantle the notion that this is some sort of Keynesian turn away from neoliberalism or a “rescue mission” that will reinvigorate crumbling public services. Perhaps telling is the manner of the previous government’s fall in January.

At the time, centrist leader Matteo Renzi insisted that he was toppling Giuseppe Conte’s Democratic/Five Star–backed administration because it failed to draw on European Stability Mechanism loans. Yet neoliberal centrists’ demand to take on such loans was curiously dropped over recent weeks, as the operation to replace Conte with Draghi unfolded. Rather, the decisive factor was that Draghi is a “safer pair of hands” from the perspective of European institutions and Confindustria — and even less susceptible to pressure from the center-left parties’ voter base, as concessions to labor in the early part of the pandemic are rolled back.

If the New York Times asks if Draghi can “save Italy like he saved the euro,” it’s worth asking what this entails. As European Central Bank chief, Draghi promised to do “whatever it takes to save the euro,” — and achieved this by making central bank support conditional on privatizing and budget-cutting “reforms,” whose toll southern Europe’s public services are still paying today.

And then there’s the question of how much new funding is actually available. As economists Emiliano Brancaccio and Riccardo Realfonzo note in a letter to the Financial Times, the European Recovery Fund money (€127 billion) is mostly loans serving to cushion Italian interest rates; the €82 billion total of grants is near-halved when considering Italian contributions to the fund. As they note, the resulting €7 billion grants a year for six years make for a rather thin gruel compared to the €160 billion destroyed in under a year of coronavirus crisis — not to mention that Italy is forecast to spend €60 billion on interest on its €2.6 trillion public debt in 2021.

Beyond the limited new resources available to his government, Draghi’s ministerial picks represent a marked rebalancing to the right, even compared to Conte’s tepid social-democratic measures. This “national unity” cabinet includes a broad array of parties, but with the key ministries in the hands of the most staunchly neoliberal figures and a total lack of representation for labor.

His economy minister Daniele Franco has a similar background in the Bank of Italy and European institutions (and, like Draghi himself, played a key role in the formation of the Monti government in 2011); the economic development minister is the Lega’s Giancarlo Giorgetti, a hard-right politician but also alumnus of the free-marketeer Bocconi school; and the minister for public administration is Berlusconi ally Renato Brunetta. In the lead-up to the government’s formation Giorgetti insisted on a rebalancing in favor of “producers” rather than “handouts,” a hope seemingly realized in the lopsided presence of business allies from wealthier Northern regions.

That the hard-right Lega would sign up to a government with such a strong “pro-European” and establishment identity may surprise those who imagined it to be an “Italexit” force. In reality, the Lega has never pursued such a policy with any resolve, including in government in 2018–19, and it has allied with centrist forces before (notably in former central banker Lamberto Dini’s technocratic administration in 1995). While Salvini gave the party a more anti-political and demagogic edge, as he expanded it into Southern regions for the first time, this was married with its original vocation as a Thatcherite party of Northern small (and some big) business.

In recent days, Salvini has called for the Draghi government to adopt the Lega-run Lombardy region as a model for the national health service — a record of prioritizing hospitals over local doctors and primary care, and promoting privatization. We can fully expect him to continue the Lega’s tradition of posing as an opposition party even while a junior coalition partner in government, demanding goodies for its heartlands as well as an overall pro-privatization, tax-cutting policy.

For the parties that dominated Conte’s administration — the Democrats, and the Five Star Movement — there was no question of forcing early elections rather than backing Draghi. Despite its distant origins in the Communist Party that dissolved in 1991 (and to a lesser extent, but overrepresented in its leadership ranks, the Christian Democrats) the Democratic Party’s identity is premised above all on Europeanism and institutional responsibility.

While soft-left Andrea Orlando will be Draghi’s labor minister, the premier’s record — and allies — suggests that there will be even less room for pro-labor policies than under Conte. Decisive, in this regard, is the current ban on layoffs, imposed during the lockdown period despite sharp opposition from employers’ federation. This temporary block threatens not to be renewed after March 31 — risking misery for hundreds of thousands of workers. Yet since Draghi announced his ministerial team on Friday, criticism from Democratic ranks focused on the number of center-left women in the administration (zero) rather than the government’s overall character.

Missing Opposition

Democratic Party leader Nicola Zingaretti initially insisted that he would never enter a government with Lega ministers. But he soon dropped this posture in deference to Draghi, and even the more left-wing coalition Liberi e Uguali (LeU) took a similar route. Within this latter grouping, a small party called Sinistra Italiana held an internal vote in which 87 percent rejected support for Draghi’s administration. But, telling of the weakness of anti-neoliberal forces, the debate centered on a refusal to ally with the Lega, rather than a rejection of the former European bank chief’s own project; indeed, even the most left-wing forces in the Italian parliament are more like Greens in similar countries, than a communist or radical left.

Supporters of the Five Star Movement, still the largest force in parliament, also voted by 60 percent to back the administration, prompting dissident leader Alessandro di Battista to quit this once–”anti-establishment” party. Five Star personalities like Beppe Grillo and foreign minister Luigi di Maio — once hostile to all coalitions between parties — again showed themselves “ready for anything, capable of very little,” backing the Draghi administration without in imposing political priorities upon it.

It is a great irony that while for decades the Italian center-left has subordinated almost any other political question to “resistance” against first Silvio Berlusconi then Matteo Salvini, it now backs a government including these same obnoxious hard-right forces. Yet, given the center-left’s liberal and pro-EU rather than socialist assumptions, there is a clear logic to their stance: Draghi is no mere figurehead, and his own strand of technocratic neoliberalism is certainly the hegemonic force in this administration. Forza Italia and the Lega may even be temporarily weakened by this latest moment of centrist boosterism.

We also shouldn’t expect this pact to last very long — in regional governments up and down Italy there is a broad opposition between the center-right and a (putative) Democratic–Five Star pact, a binary which will likely again harden by the general election due by March 2023. Small leftish forces like Sinistra Italia bet precisely on this kind of remolding of the center-left, including Five Star. But what the Draghi government does show is the minimal democratic choice on the fundamentals of economic policy, as both media and the main political parties bathe whatever technocrats decide in an aura of iron “necessity.”

In reality, the hardly impressive scale of European funds, combined with the same old free-market “reforms” demanded by neoliberal hawks, suggest that Draghi’s promise of being all things to all people won’t last very long. The problem is, decades of defeats for labor and the center-left’s lack of distinct priorities make it hard to see where an alternative could come from, for instance providing a political home to disillusioned Five Star voters.

The only major party that refused to join Draghi’s government, Giorgia Meloni’s post-fascist Fratelli d’Italia, is the force already keenest to go to the polls. It currently stands at around 16 percent support (four times its March 2018 score), mounting a rapid rise reminiscent of previous “anti-establishment outsiders” like Five Star and the Lega. Bidding to detoxify its Mussolinian roots, Fratelli d’Italia is in some ways a more “normal” conservative party than even the Lega, combining elements of Spain’s Partido Popular and welfare-chauvinist parties in central-eastern Europe. Yet it is extremely troubling that such a force should be the only opposition, with the Left both absent and unable to pose any kind of political alternative to Draghi.