Adam Tooze has a remarkably thorough Substack post on the upcoming presidential election in Italy, which complicated mechanisms will set in motion on January 24. This is not a direct election but an indirect one. Italy is a parliamentary democracy and the President is elected, on a secret ballot, by the House, the Senate and a number of regional delegates: a total of 1,009 people. In the first three rounds of votes, the President needs a two-thirds majority to be elected; after that, a bare majority is enough. This year, Covid-positivity may be a factor for attendance.

As a rule, the election of the President of the Italian Republic does not attract much of international attention, but this time is. As Tooze puts it, “the question has arisen of whether Mario Draghi should remain as Prime Minister for a limited term that expires in 2023 at the latest, or gamble on his elevation to the Presidency, which would keep him in power for seven more years”. The New York Times also has a piece by Jason Horowitz on the matter.

Why is this election that relevant? Italy’s debt to GDP ratio is, after the pandemic, 162.5%. The country recorded strong growth in 2021 (6.2%) after a tragic 2020 (-8.9%). Moreover, it is the major beneficiary of the “Next Generation EU” program. “Having that money in the hands of Mr. Draghi has reassured global markets and European Union leaders and given Italy its best shot at modernization in decades.”, writes Horowitz. Its international credibility is good at the moment (such things in Italy come and go), largely because of former ECB Chairman Mario Draghi, who was appointed prime minister one year ago. Draghi’s government is supported by all major political parties, with the exception of the right-wing, nationalist “Fratelli d’Italia” (Brothers of Italy).

The rationale for Draghi’s appointment is so explained by Tooze:

How can Italy be steered through the rapids and set on a more positive course of development? Since this is a hard task for elected politicians, five times in recent decades the job of Prime Minister has been handed to a non-parliamentary figure.

The most recent parachutist is Mario Draghi, recently retired from the ECB. He took office in January 2021 to oversee the spending of the NextGen EU package. This allocates over 200 billion Euro to Italy in grants and credits. This, if you like, is Europe’s gamble on using investment to accelerate Italian growth.

Tooze is referring to governments led by former Bank of Italy governor Carlo Azeglio Ciampi (1993), former Bank of Italy General Director Lamberto Dini (1995) and former European Commissioner Mario Monti (2011). I guess the fifth PM Tooze has in mind is Giuseppe Conte, who headed the last two governments before Draghi’s. But though a non-parliamentary figure, Conte, a university professor who is now the head of the Five Stars Movement, cannot be considered a technocrat.

Ciampi’s, Dini’s and Monti’s cases are quite different from each other. Let’s stick with the last two. Dini was called to form a government after Silvio Berlusconi had his first stint at governing the country for six months. One of the parties supporting Berlusconi, the Northern League, left its coalition. Hence Dini was entrusted with a caretaker government, which was not supported by Berlusconi and the right. In that circumstance, he succeeded in reforming the pension system and implemented a number of less visible reforms.

Likewise, Monti was appointed after a Berlusconi’s government, in 2011. Italy was in the midst of a financial storm. Berlusconi’s credibility was very low, largely because a number of the most controversial aspects of his private life had emerged. Monti was supported by everybody but the “nationalist” right: Salvini’s Northern League opposed his administration and a group of right wingers left Berlusconi’s party, to establish Brothers of Italy, to be led by Giorgia Meloni. Monti reformed again the pension system (which had been “reformed back” after the Dini reform), increased taxes to cope with the financial crisis, and attempted some liberalisation.

Draghi’s circumstances are quite different: he was appointed to spend money, not to put a check on spending. In the last year there weren’t many reforms which he can claim to his credit, though he can certainly claim a very successful COVID vaccination campaign. Other than this, his management of the pandemic has been “in line” with his predecessor, the Five Stars prime minister Conte, which is hardly surprising since they both counted on the same Health Minister, Roberto Speranza. The Draghi government was certainly less eager to renationalise everything than its predecessor, but it too emphasized the importance of public investment too and did not stop any of the nationalisations which begun with Conte.

Why should Draghi become Head of State? Those who support him see this move as instrumental, leveraging his reputation for the next seven years. As a prime minister, he has another year ahead of himself, before elections are due in 2023. Very broad coalitions are seldom well behaved and, particularly in election years, they tend to create trouble, as all the parties will be busy finding ways to make their constituencies happier.

Is the Head of State role non-executive and, thus, a bit detached from the possibility of having an impact over policies?

Tooze mentions a very good article by Carlo Fusaro, that explains the importance of the President of the Republic. Such office is hardly merely ceremonial: Italy’s President is not Queen Elizabeth. In part, because of recent constitutional reforms, the office has increased its powers over time. In part, because, as Fusaro writes:

…a political system that for years has not been able to bring forth stable governments and that appears to be in permanent evolution, ends up thinking that much (if not everything) may depend on who will be its guardian.

The President is supposed to be the guardian of the Constitution, but is also the guardian of the political system. Italy’s political system has experienced a number of crises in the last few years, which coincided with the appointment of non-parliamentary figures as prime ministers that Tooze refers to. These crises were in part triggered by financial problems, but were also genuinely political crises: in 1994, Berlusconi looked inadequate to govern the country but the left did not feel like they could reorganise and win elections if they were called. The Northern League (that “seceded” from the Berlusconi coalition) did not want to go to the ballot, because, as a consequence of a pre-election deal with its former coalition partner, it was over-represented in Parliament. In 2011, the left again would have been a major beneficiary of the breakdown of the Berlusconi government, but no one wanted to be responsible of governing a country which appeared on the brink of default.

In the last parliamentary term, things were a bit different: the absence of a clear parliamentary majority, together with the electoral success of the populists of the left and the right, made strange bedfellows. So we got first a government that put together left and right populists and then a government supported by the moderate and the populist left (ironically, the prime minister was the same). Then, on the one hand, the pandemic weakened the social fabric and advised for a larger majority; on the other, the fact that Italy was to benefit from “European solidarity” with the Next Generation EU fund created the conditions for a wider agreement among political forces, as the social groups supporting them each wanted to get their slice. But in a much embittered political scenario (like in the US, there is no question that the political rhetoric is far more destructive now than it was in the 1990s), for harmony to be engineered you needed a highly credible prime minister. Hence, Draghi.

In his piece, Tooze sees a Draghi presidency as a stabilizing factor for Italy’s EU relationships, therefore pretty much in Brussels’s interest.

The idea is that if Draghi were made President, in the event of a right-wing populist electoral breakthrough, he would have the authority to resist a government that embarked on an aggressive nationalist course that put Italy’s euro membership in doubt, thus risking a devastating sovereign debt crisis that through its entanglement with the Italian banking system would spill over into a banking crisis. For Europe this doom-loop is ominous.

That is true, but you can look at it from another perspective. it is almost inevitable that the right will win the next elections. I see a Draghi Presidency not as a safeguard against such an event, but somehow as a life jacket for those very right wing politicians. Those who would gain the most out of a Draghi’s presidency are the right wing leaders Salvini and Meloni: they become far more plausible (or, at least, less alarming) candidates for the prime minister office, with such a pro-Europe champion as head of state.

A man who is so internationally reputed as Draghi could not so much prevent the right from forming a government, but rather help them in adjusting their agenda and convince European partners that they are not so threatening as they seem. This explains why both Salvini and Meloni do actually look favorably at a Draghi presidency, though they have problems in openly advancing the hypothesis (at least, as of today) because it clashes with their rhetoric. Isn’t Draghi, after all, the “eurocrat” par excellence?

Tooze makes much of President Mattarella’s (his mandate is due to end in a few days) veto on Paolo Savona as a Treasury Minister. Savona is a senior Italian economist, not necessarily right of center, who flirted with the idea of quitting the euro. He was not appointed Treasury Minister but was appointed European Affairs Minister, and later he was made President of the Italian SEC.

In 2018, the veto by President Mattarella changed the composition of the first Conte government, the one supported by the populists of the right and of the left at the same time. Tooze sees the matter in terms of protection of Italy’s euro-membership and devotes much of his article to the nature of the EU/Italy relationship. I think perhaps some more context here is needed. The 2018 elections saw the the Five Stars Movement and the Northern League emerging as the two winners. They did not campaign on the possibility of a mutual alliance and, in spite of being the two main anti-system parties, they ended up forming a majority in Parliament, in perfect accord with the system’s rules. The President had the very difficult task of exploring different majority possibilities and arranging such a marriage. While both the Five Stars Movement and the Northern League were largely euro-skeptic, they did not campaign on a program for Italy to leave the euro (the League brought some strong eurocritics in Parliament, but that’s another matter), nor their electoral alliance was predicated on such an explicit platform. The Northern League was in an electoral coalition whose other main pillar, Forza Italia, was certainly committed to defend euro-membership.

The President was concerned with the financial turmoil that the appointment of Paolo Savona, since the latter played with the idea of euro-exit in books and articles, might have triggered. The President’s concerns were more immediate and they, again, had a largely political background: a euro-skeptic government was not the outcome of elections in which this issue was in any way central to the debate. The main themes of that election round were immigration, security, tax reform. So, I do not consider this reading as particularly “kind” to President Mattarella. Plus, as said, Savona was made Minister for European Affairs: certainly not a portfolio as important as Treasury, but nonetheless one which brought him in touch with the European institutions.

Sure enough, Italy’s President is more of an alchemist of the political system, particularly because the latter is often in a situation of instability with an inability to produce effective government coalitions. This increases the latitude of its power. A Draghi presidency would have its main strength in the fact that Draghi is personally credible with Brussels and other EU member states. But how big should a single man’s shoulders to be, to support a three trillion euros debt? Italy is “too big to fail and too big to bail”, as Tooze writes. Plus, its political system has problems in bringing together consensus and ability to govern: the people who have votes tend not to have much of a policy agenda, nor very visible administrative skills. How much of problem the country can represent for the Eurozone, we will see in the coming years.