During its formation last month, the new government of Mario Draghi was presented by almost all the Italian and international media as a rescue operation. Where former European Central Bank (ECB) chief Draghi “saved the euro” in the 2010s, most outlets gushed about “Super Mario» and his project of «save italy“by pouring 209 billion euros of cash into the European recovery fund while”reform” its lackluster economy.
What kind of “reforms” this meant was not mentioned – and after all, this government has nothing to do with voter decisions or the coalitions that ran in the last general election. But for the fourth time since the 1990s, a president calls on a technocrat from the world of finance and banking to form a cabinet, halfway to a parliament. Eight of Draghi’s twenty-three ministers are unelected technocrats, in a so-called government of experts.
While these personalities are non-partisan, they have similar backgrounds and instincts. Economy Minister Daniele Franco is a former Bank of Italy official who wrote the famous ECB letter of 2011 ordering the government to implement privatizations and reduce collective bargaining. Former Vodafone CEO Vittorio Colao – now Minister for Innovation and Digital Transition – is a former partner at private consultants McKinsey & Company.
Now it has been revealed that McKinsey is going to be loaded with the drafting of Italy’s economic plan for the coming period, which will be submitted for consideration by the European Commission at the end of next month. Famous for his role in the Enron scandal as well as the 2008 financial crisis – as he encouraged the unlimited securitization of mortgage assets – and the Failed deployment of the vaccine in France, the cabinet is now called upon to shape the “reform” program of the Draghi government.
The Republic, the country’s main centre-left daily, raved about the decision. “Faced with a race against time,” Draghi’s government “assumed the position of a private company facing a new business opportunity that is not part of its core business.” While that same newspaper reported on March 1 that the need to “hurry up” meant that Draghi himself 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, especially since this claim is also largely made for Draghi”technicalthe government itself. For decades, the imposition of neoliberal recipes in Italy has been advanced by this same procedure, with the agenda advanced by the privatizers formulated in the dogma of “inevitable choices”.
For now, Draghi enjoys a high public approval rating, just as predecessors like Mario Monti did in the early months of media acclaim. But the Italians will soon discover that he does not have 209 billion euros of new money to spend (the total of loans and grants from the European fund, before considering the Italian contributions to it), but closer to 10 billion euros per year– a paltry sum compared to the 160 billion euros of effect of the pandemic on Italy.
Upon his appointment by President Sergio Mattarella, many of Draghi’s press cheerleaders insisted that it would not be like the government led by Mario Monti in 2011-2013, whose austerity measures have destroyed demand and led to a 3% drop in GDP. While Draghi put his name on the ECB letter who paved 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 once again captured the government. The choice of Francesco Giavazzi, professor at Bocconi University in Milan, as economic adviser is revealing: where his predecessor, Mariana Mazzucato, is a renowned Keynesian, Giavazzi is an avowed Thatcherite and a defender of the “external link”. European (i.e. using EU funding conditions to reshape the Italian labor market and public services).
Like Lorenzo Zamponi writes, it is quite possible that there is some change since the “broad austerity” of the 2010s – that is, Draghi will put economic reforms above simply cutting overall spending. Yet the appointment of ideologues from the McKinsey and Bocconi school points to the same gospel of privatization and deregulation that technocrats have imposed on Italy for decades, never winning popular support.
Blairite oddball Matteo Renzi was instrumental in the rise of this government, and while his own Italia Viva party garners less than 3% support, figures of similar political orientation are back in power. The soft-left forces that backed the previous administration have also aligned themselves with Draghi, however, with the previous Five Star-Democratic coalition’s ban on layoffs likely one of the first casualties of the new agenda.
Government by experts may sound good – but only so long as we forget about all the previous rounds of these “remedies”, which helped push Italy’s GDP below where it was in 1999. But The Republic is, in its own way, quite fair to compare this decision to a company using McKinsey. Because a failing company is not a democracy either — and when the consultants call for restructuring, it’s the workers who get screwed.