One thing European leaders always knew about Italian Prime Minister Mario Draghi was he would never lose his cool.
When European Commission President Jean-Claude Juncker gathered senior policymakers on the 13th floor of the Berlaymont building in Brussels to thrash out details of the third Greek bailout in 2015, some were expecting trouble from then-Greek finance minister Yanis Varoufakis.
However, as Juncker worked line-by-line through proposed tax changes with a small group including then-Greek prime minister Alexis Tsipras, Varoufakis was engrossed in debate with Draghi at the other end of the room, according to two people who were present. At 3am, the anti-capitalist firebrand and the head of the European Central Bank (ECB) were debating GDP deflators and macroeconomic policy dilemmas from the 1930s like a pair of academics.
Three days later, Draghi shut off emergency liquidity to Greece and Tsipras eventually signed up to a version of the deal agreed that night.
This episode serves as a reminder of the qualities the 73-year-old veteran brings to the table. He is calm, ruthless and completely on top of the brief.
Draghi is not your typical central banker, according to a senior EU official who dealt with him first hand during his eight years at the helm of the ECB, and he is no ordinary technocrat. He is highly political and understands how to wield power, the official said. His return to the leaders’ council marks the arrival of a heavyweight who is respected across the EU’s political and geographical divides.
“Draghi’s authority, his confidence with European and world leaders, and his granular knowledge of procedures and institutions will definitely be consequential,” says Filippo Sensi, an Italian lawmaker who worked as a spokesman for two of Draghi’s predecessors.
During his time at the ECB, Draghi was one of the few outsiders who would prompt leaders to look up from their phones and listen when he entered the room, remembers one former prime minister. The central bank chief’s presentation would often open the summit discussion and, as the first to speak, he would shape the debate that followed, a senior official said.
He could spur leaders to action by describing even the gravest scenarios in a concise, sharp and factual way, one senior official said, while several other diplomats recalled that he remained cold-blooded and composed in the tensest moments.
His premiership comes with German Chancellor Angela Merkel preparing to step aside, French President Emmanuel Macron facing a difficult election next year and the EU as a whole shaken by the trauma of the COVID-19 pandemic.
Senior officials have high hopes for Draghi and believe he is uniquely positioned to drive change at home and in Brussels, but one summit veteran said he was worried that expectations fail to take account of how the complex domestic situation could undermine his position and power, and warned there is a risk of disappointment.
The task of fixing Italy has proved too much for a succession of prime ministers over the past two decades and Draghi has two years at most before another election is due.
“For Italy and for the system as a whole, this is a moment that is very delicate for the EU’s future,” Sensi said.
Draghi takes office with a wide parliamentary mandate and high polling numbers. Recent figures show about 65 percent of voters are optimistic about his prospects.
However, Italy’s economy had stagnated for years before the pandemic claimed more than 95,000 lives and left public debt approaching 160 percent of GDP. Draghi’s challenge is to use the might of the EU’s 750 billion euro (US$910 billion) recovery package to boost long term growth by cutting red tape, helping young people to find good jobs and fixing the logjam in the courts which scares off potential investors.
Like the EU’s other 26 leaders, Draghi’s immediate priority will be the recovery from the pandemic and getting people vaccinated quickly. Beyond that, he has a chance to complete a strategic plan — and legacy — that he himself mapped out during his time with the ECB in Frankfurt and since.
Draghi used to tell leaders that recovery from the financial crisis would involve three legs, a senior official said. The ECB needed to buy time, which it did by buying up government debt. Next the bloc and its institutions had to build fiscal capacity — and the recovery fund is a key step on that path.
Finally, member states have to use that time and those tools to take serious measures to upgrade their economies. In Italy, the most important economy in that process, Draghi now gets to take charge of the overhaul himself.
The prospect of future European integration may hinge on whether he succeeds.
France’s Macron and German Finance Minister Olaf Scholz, an outsider to succeed Merkel as chancellor this year, have both insisted that the recovery fund should be a step toward deeper fiscal integration.
However, establishing more permanent fundraising capabilities will effectively depend on the success, or failure, of how Italy spends the 209 billion euros it will receive through the pandemic recovery funds, according to two diplomats from different ends of the continent.
In the eyes of the so-called frugal member states, such as the Netherlands, Draghi has the credibility to make the case for deeper integration, one of the diplomats said. Dutch Prime Minister Mark Rutte and his allies will know that he backs his arguments with facts and not populistic narratives.
If it works, in a few years’ time he may be able to cash in on that trust and push for a more permanent tool, the diplomat went on to suggest. However, if he fails, the diplomat said, the consequences will be felt well beyond Italy’s borders.
There is much evidence that the Chinese Communist Party (CCP) is sending soldiers from the People’s Liberation Army (PLA) to support Russia’s invasion of Ukraine — and is learning lessons for a future war against Taiwan. Until now, the CCP has claimed that they have not sent PLA personnel to support Russian aggression. On 18 April, Ukrainian President Volodymyr Zelinskiy announced that the CCP is supplying war supplies such as gunpowder, artillery, and weapons subcomponents to Russia. When Zelinskiy announced on 9 April that the Ukrainian Army had captured two Chinese nationals fighting with Russians on the front line with details
On a quiet lane in Taipei’s central Daan District (大安), an otherwise unremarkable high-rise is marked by a police guard and a tawdry A4 printout from the Ministry of Foreign Affairs indicating an “embassy area.” Keen observers would see the emblem of the Holy See, one of Taiwan’s 12 so-called “diplomatic allies.” Unlike Taipei’s other embassies and quasi-consulates, no national flag flies there, nor is there a plaque indicating what country’s embassy this is. Visitors hoping to sign a condolence book for the late Pope Francis would instead have to visit the Italian Trade Office, adjacent to Taipei 101. The death of
The Chinese Nationalist Party (KMT), joined by the Taiwan People’s Party (TPP), held a protest on Saturday on Ketagalan Boulevard in Taipei. They were essentially standing for the Chinese Communist Party (CCP), which is anxious about the mass recall campaign against KMT legislators. President William Lai (賴清德) said that if the opposition parties truly wanted to fight dictatorship, they should do so in Tiananmen Square — and at the very least, refrain from groveling to Chinese officials during their visits to China, alluding to meetings between KMT members and Chinese authorities. Now that China has been defined as a foreign hostile force,
On April 19, former president Chen Shui-bian (陳水扁) gave a public speech, his first in about 17 years. During the address at the Ketagalan Institute in Taipei, Chen’s words were vague and his tone was sour. He said that democracy should not be used as an echo chamber for a single politician, that people must be tolerant of other views, that the president should not act as a dictator and that the judiciary should not get involved in politics. He then went on to say that others with different opinions should not be criticized as “XX fellow travelers,” in reference to
RSS