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Draghi, the New Face of Europe? Not so Fast

Draghi, king of Europe? He's great, says Rachel Sanderson, but he may not be the right fit for a post-Merkel EU.

Draghi, the New Face of Europe? Not so Fast
Mario Draghi, Italy's prime minister. (Photographer: Alessia Pierdomenico/Bloomberg)

Prime Minister Mario Draghi of Italy is being heralded as a new leader for Europe in the post-Angela Merkel era. With German politics in the deep freeze and France’s Emmanuel Macron facing presidential elections, Draghi, who’s credited with saving the euro with three words, looks like an unequalled pair of safe hands. 

To get an idea of why Europe’s elites are so enthusiastic about the idea of Draghi taking a bigger role in Europe, you need only look at the outcome in the first round of Italian mayoral elections, which took place earlier this month. Instead of trending toward the far-right politics embodied by Matteo Salvini, voters opted for mostly understated bureaucrats, a kind of army of mini Marios.

Italian politics remain volatile, as shown by clashes over the use of “green passes” to prove vaccination and large protests in Milan and the port city of Trieste. Not coincidentally, this is because Draghi — who was appointed premier this year after Italy’s elected politicians failed to manage the pandemic — is driving the narrative of Europe’s post-Covid economic revival. Italy has vaccinated 80% of its population above the age of 12 and infections have come down significantly since the beginning of the pandemic, when the country was one of the worst affected outside of China.

Draghi has stayed the course, refusing to be moved the protests. His steadfastness provides more impetus and support to Italy’s moderates. For a Europe hoping to mute extremism, Italy could become an encouraging bellwether. The country has an uncanny history of being an omen: Fascism begetting Nazism, Silvio Berlusconi prefiguring Donald Trump. The rise of populism here was seen as a harbinger for wider Europe. Now its wane — notably in a country whose economy is on a two-decade decline — is welcome news. And that would be thanks to the new mood that wonkish, gravitas-laden Draghi has brought to Italy.

Italy has received the largest payout of the NextGenEU funds, more than 200 billion euros ($231 billion). The success or failure of the project depends on whether Draghi spends the handout well. So far the signs are encouraging. Much of infusion is aimed at making the economy more digital and resilient. About 40% will go to climate-related initiaves. Even French newspaper Les Echos has hailed Italy’s apparent transformation from the sick man of Europe to an examplar: “All roads now lead to Rome.”

Draghi’s international standing and experience make him an obvious candidate to lead Europe. His famous “Whatever it takes” speech in London in 2012 already delivered for Europe — and promises more to come. He is a pragmatist and good at balancing competing views. He is also, in the words of someone who negotiated with him at the ECB, adept at “seducing” those he is quietly trying to persuade.

But it would be mistake for Europeans to pin their hopes on the idea that Draghi is interchangeable with Merkel or Macron. Most notably, he’s likely to be a closer ally of the U.S. — what with a history at Massachusetts Institute of Technology, the World Bank and Goldman Sachs Group Inc.

Brunello Rosa, who runs an advisory and research firm with the economist Nouriel Roubini, recently told me that while Draghi believes deeply in multilateralism, it’s one where the main shareholder is the U.S. A celebration of him by U.S. Treasury Secretary Janet Yellen in Time magazine last month makes that clear. Indeed, since becoming Italy’s prime minister, Draghi’s led a pushback against the Chinese appeasement that’s characterized European foreign policy of late, going so far as to block the sale of an Italian semiconductor company to China earlier this year. Tellingly, on the AUKUS versus France debacle, Draghi remained silent.

Within the EU, he’s made clear that if Europe wants to be a key player in the global economy, it needs to be more ambitious about integration. As an ex-president of the European Central Bank, he is well placed to ruffle feathers in Brussels about a loosening of fiscal rules. A change would allow Europe to speed its move from austerity to more growth-friendly public spending.

It’s possible that Europe will embrace Draghi in all his fullness. However, there’s still one question that puts all this on shaky ground: legitimacy. Draghi is an unelected technocrat leading Italy at the behest of its president and on the basis of cross-party support from Italy’s restless politicians.

Merkel was influential because of her personal attributes, but her clout in Europe was based on her nearly 16 years of remaining  in power. However talented and exceptional he may be, Draghi’s influence will ultimately be derived from Italian national support, which is fluid in the best of times. 

It's worth keeping in mind, too, that the hard issues at the core of Europe’s future — defense and strategic autonomy — aren’t Draghi’s natural domain. Since the post-war period, Italy has hewed to the U.S., and Draghi may not be person to make the enthusiastic case for separation.

Still, Draghi has the makings of a new leader of Europe. Europe should just know what it’s getting. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Rachel Sanderson was Milan correspondent for the Financial Times from 2010 to 2020. She has also written about Italy for the Economist and reported for Reuters and Reuters TV from Rome, Paris and London.

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