After his formation last month, Mario Draghi’s new government was announced by almost all Italian and international media as a rescue operation. While the former head of the European Central Bank (ECB), Draghi “saved the euro” in the 2010s, most media commented on “Super Mario” and his plan to “save Italy”, pouring € 209 billion in European recovery funds while “Reforming” its lackluster economy.
The type of “reforms” that this meant was not mentioned – and, after all, this government has nothing to do with voters’ decisions or the coalitions that competed in the last general elections. But for the fourth time since the 1990s, a president has summoned a technocrat from the world of finance and banking to form a cabinet in the middle of parliament. Eight of Draghi’s twenty-three ministers are unelected technocrats, in a so-called government of experts.
If these figures are not party politicians, they have similar experiences and instincts. Economy Minister Daniele Franco is a former employee of the Bank of Italy who wrote the famous ECB letter of 2011 instructing the government to implement privatizations and reduce collective bargaining. Former Vodafone CEO Vittorio Colao – today minister of innovation and digital transition – is a former partner at private consultancy McKinsey & Company.
Now, it has been revealed that McKinsey will be tasked with drafting Italy’s economic plan for the next 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 in the 2008 financial crisis – as it promoted the unlimited securitization of mortgage assets – and the failed implementation of vaccines in France, the company is now being called upon to shape the “reform” agenda “from the Draghi government.
La Repubblica, the country’s main center-left daily, was enthusiastic about the change. “Faced with a race against time”, the Draghi government “took the position of a private company in the face of a new business opportunity that is not part of its main activities”. Although this same newspaper reported on March 1 that the need to “hurry” meant that Draghi himself would write the recovery plan, along with finance minister Franco, he 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 because this claim is also widely made for Draghi’s “technical” government. For decades, the imposition of neoliberal recipes in Italy has advanced through this same procedure, with the agenda advanced by the privatizers expressed in the dogma of “inevitable choices”.
For now, Draghi enjoys high rates of public approval – as do predecessors like Mario Monti in the early months of media acclaim. But Italians will soon discover that he does not have € 209 billion in new money to spend (the total in loans and grants from the European fund, before considering Italian contributions to him), but close to € 10 billion a year – a pittance in compared to the 160 billion euro effect of the pandemic in Italy.
Following his nomination by President Sergio Mattarella, many of Draghi’s press fans insisted that he would not be like the government led by Mario Monti in 2011–13, whose austerity measures destroyed demand and brought a 3% drop in GDP. Although Draghi put his name on the ECB’s letter that paved the way for Monti’s “reforms”, he admitted more recently that we will have to live with the reality of high public debt.
However, Draghi’s recent appointments confirm that the same old figures have conquered the government again. Revealing was the choice of Francesco Giavazzi, a professor at the Bocconi University in Milan, as an economic advisor: where his predecessor, Mariana Mazzucato, is a renowned Keynesian, Giavazzi is a confessed Thatcherite and defender of the European “external link” (that is, using EU funding conditions to reshape Italy’s labor market and public services).
As Lorenzo Zamponi writes, it is quite possible that there are some change since the “expansive austerity” of the 2010s – that is, Draghi will place economic reforms above a simple reduction in general spending. However, the appointment of the ideologists from McKinsey and the Bocconi school points to the same gospel of privatization and deregulation that technocrats have been imposing on Italy for decades, without ever gaining popular support.
The strangely blairist Matteo Renzi played a decisive role in the rise of this government and, although his own party Italia Viva has votes of less than 3% in support, figures of similar political orientation are again in power. The soft-left forces that supported the previous government, however, also lagged behind Draghi, with the ban on layoffs from the previous Five Star-Democrat coalition probably one of the first victims of the new agenda.
Government by experts may look good – but only as long as we forget all previous rounds of such “cures”, which helped to push Italy’s GDP below the level in 1999. But La Repubblica It is, in its own way, quite correct to compare this change with a corporation that is hiring McKinsey. For a bankrupt company is also not a democracy – and when consultants ask for restructuring, workers are the tools.