Upon its formation last month, Mario Draghi’s new government was heralded by almost all Italian and international media as a rescue operation. Where the former European Central Bank (ECB) chief Draghi had “saved the euro” in the 2010s, most outlets gushed over “Super Mario” and his plan to “save Italy” by splashing a mooted €209 billion in European recovery fund cash while “reforming” its lackluster economy.
The kind of “reforms” this meant went unmentioned — and after all, this government bears no relation to voter decisions, or the coalitions that ran in the last general election. But for the fourth time since the 1990s, a president called on a technocrat from the world of finance and banking to form a cabinet, halfway through a parliament. Eight of Draghi’s twenty-three ministers are unelected technocrats, in a so-called government of experts.
If these figures are not party-political, they have similar backgrounds and instincts. Economy minister Daniele Franco is a former Bank of Italy official who drafted the famous 2011 ECB letter instructing the government to implement privatizations and cut back collective bargaining. Former Vodafone CEO Vittorio Colao — today innovation and digital transition minister — is a former partner at private consultants McKinsey & Company.
Now, it has been revealed that McKinsey is going to be tasked with writing Italy’s economic plan for the coming period, to be submitted for review by the European Commission at the end of next month. Notorious for its role in the Enron scandal as well as the 2008 financial crisis — as it promoted the boundless securitization of mortgage assets — and the botched vaccine rollout in France, the firm is now being called on to shape the Draghi government’s “reform” agenda.
La Repubblica, the country’s leading center-left daily, gushed over the move. “Faced with a race against time,” Draghi’s government “has assumed the position of a private corporation faced with a new business opportunity that isn’t part of its core activities.” While this same paper reported on March 1 that the need for “hurry” meant Draghi himself would write the recovery plan, together with finance minister Franco, this has now been outsourced.
The suggestion that this is a purely “technical” collaboration — that McKinsey’s choices will not be political — is patently absurd, not least given that this claim is also widely made for Draghi’s “technical” government itself. For decades, the imposition of neoliberal recipes in Italy has been advanced through this same procedure, with the agenda advanced by privatizers couched in the dogma of “unavoidable choices.”
For now, Draghi does enjoy high public approval ratings — just as predecessors like Mario Monti did in the early months of media acclaim. But Italians will soon find out that he doesn’t have €209 billion in new money to spend (the total in loans and grants from the European fund, before considering Italian contributions to it), but closer to €10 billion a year— a pittance compared to the €160 billion effect of the pandemic on Italy.
Upon his appointment by president Sergio Mattarella, many of Draghi’s press cheerleaders insisted this wouldn’t be like the government led by Mario Monti in 2011–13, whose austerity measures destroyed demand and brought a 3 percent fall in GDP. While Draghi put his name to the ECB letter which prepared the way for Monti’s “reforms,” he has more recently admitted that we will have to live with the reality of high public debt.
Yet Draghi’s recent appointments confirm that the same old figures have again captured the government. Telling was the choice of Francesco Giavazzi, a professor at Milan’s Bocconi University, as economic adviser: where his predecessor, Mariana Mazzucato, is a renowned Keynesian, Giavazzi is an avowed Thatcherite and advocate of the European “external bind,” (i.e., using EU financing conditions to reshape Italy’s labor market and public services).
As Lorenzo Zamponi writes, it is quite possible that there is some shift since the “expansive austerity” of the 2010s — that is, Draghi will put economic reforms above a simple reduction in overall spending. Yet the appointment of McKinsey and Bocconi-school ideologues points toward the same gospel of privatization and deregulation that technocrats have been imposing on Italy for decades, without ever winning popular backing.
The outlandishly Blairite Matteo Renzi played a decisive role in this government’s rise, and while his own Italia Viva party polls under 3 percent support, figures of similar political orientation are once again in power. The soft-left forces who backed the previous administration have, however, also fallen in line behind Draghi, with the previous Five Star–Democratic coalition’s layoffs ban likely one of the first casualties of the new agenda.
Government by experts may sound good — but only so long as we forget all the previous rounds of such “cures,” which have helped push Italian GDP below the level it was at in 1999. But La Repubblica is, in its own way, quite right to compare this move to a corporation calling in McKinsey. For a failing business isn’t a democracy either — and when the consultants call for restructuring, it’s the workers who get screwed.