How Draghi’s Italy became ‘model European’

Two years ago Italy was at risk of becoming a pariah inside the EU. A furious Emmanuel Macron, France’s president, had recalled his ambassador to Rome after Italy’s deputy prime minister held an unauthorised summit with French “Yellow Vest” protesters. 

At the same time Italy’s then interior minister Matteo Salvini pumped out daily social media tirades against Brussels, and smiled for selfies with French far-right leader Marine Le Pen.

Behind the scenes Italian diplomats found themselves increasingly isolated, their government viewed by many as an unstable and untrustworthy partner led by politicians who wanted to weaken the EU, and flirt with Moscow and Beijing.

But less than three months into the national unity government of prime minister Mario Draghi, not only is Rome’s voice being heard loud and clear in Paris and Berlin, but it is increasingly setting the agenda as the EU attempts to emerge from the Covid-19 pandemic.

“Italy was always seen as the EU’s juvenile delinquent, and now it’s the model European,” Jana Puglierin, senior policy fellow at the European Council on Foreign Relations. 

On Monday Draghi will present Italy’s plans to spend €190bn of EU loans and grants alongside a set of structural reforms seen as critical to the entire credibility of Europe’s post-Covid recovery effort. The former president of the European Central Bank has also announced Italy will run its largest budget deficit since the early 1990s, and has decided to increase borrowing ahead of a call from the IMF for all EU countries to do the same. Financial markets, often worried about the size of Italy’s public debt, for now remain unconcerned — a sign of confidence in the new prime minister.

Previously tetchy relations between Rome and Paris have suddenly blossomed, according to diplomats from both countries. Draghi holds regular calls with Macron, including one last week, to discuss the pandemic and other strategic issues. 

In February Draghi surprised many by becoming the first European leader to block exports of Covid-19 vaccines outside of the EU. The risky move, coming as tensions were flaring between the European Commission and the UK over vaccine supplies, was quickly backed up by Paris. It also provided political cover for commission president Ursula von der Leyen to call for stronger export controls.

Then, following a diplomatic incident in Ankara where an embarrassed von der Leyen was left standing without a chair in a summit with Recep Tayyip Erdogan, Draghi stepped out again. While other European leaders were largely silent, Draghi harshly criticised Erdogan, prompting anger in Turkey but deflecting the focus from the EU’s diplomatic mishap.

Clément Beaune, France’s Europe minister and former Europe adviser to Macron at the Elysée, said the relationship between Draghi and Macron was “good and easy” and dated back to the time when Draghi headed the ECB and Macron was France’s economy minister.

“They know each other well,” said Beaune. “They shared the same line at the last European summit — both insisted on the need to expand the [post-Covid] recovery plan and wanted more ambitious investment proposals. Draghi has the advantage of credibility, of having played a leadership role in a European institution . . . It makes dialogue easier.”

And in Berlin, Draghi’s first months in office have been welcomed as a return by Italy to the heart of policymaking inside Europe. “Italy is back in Europe,” said Alexander von Lambsdorff, foreign policy spokesman for Germany’s liberal Free Democratic party. “And a strong Europe needs a strong Italy.”

Von Lambsdorff said Draghi was seen in Berlin as a “European who sets great store by European institutions — as can be seen by the support he has shown the commission on vaccines and vaccine exports”. 

Enzo Moavero Milanesi, Italy’s foreign minister under the first government of Giuseppe Conte, the man Draghi replaced, said the perception that Italy was now seriously addressing its economic weakness would increase the country’s international stature.

“Italy, notably within the EU, has been perceived as a country with strong potential but weak performance, and this weakens your impact on foreign policy,” he said. “That the Italian government is now led by someone with vast professional experience dealing with foreign governments and counterparts is itself an important element of change.” 

Another factor working in his favour is that Draghi commands a huge parliamentary majority in a year where a post-Merkel Germany is preparing for elections, and Macron eyes national polls in 2022. While at least one of his counterparts in Germany and France will change, Draghi, as long as he retains the support of Italy’s political parties, will be expected to stay on until Italy’s next general election in 2023.

“Draghi coming on to the EU scene is one of the big game-changers,” said Georgina Wright, head of the Europe programme at the Paris-based Institut Montaigne. 

Others believe that there is a risk that expectations of what Draghi can realistically achieve have already become too high.

“The Italian establishment tends to fall in love with leaders, and right now it is in a phase of Draghi being seen as the man who walks on water,” says Nathalie Tocci, director of the Institute for International Affairs in Rome. “We will not do him any favours by painting him as infallible. He is capable of making mistakes.”