Italy is big enough to break Europe. Some countries, such as
Greece or Portugal, are highly indebted but their fellow Europeans
can bail them out, if necessary. Others, like France, Spain
or indeed Germany, have large debts in absolute terms, but
thanks to the size of their economies and a decent record of
growth they can cope without spooking the markets. Only Italy
has the triple whammy: a big debt stock in both relative and absolute
terms, plus an economy that was stagnant even before covid-
19 struck. The arrival of Mario Draghi, sworn in as Italy’s
prime minister on February 13th (see Europe section), offers
some hope that Europe’s sick man may get a vital healing shot.
Mr Draghi, an ex-boss of the European Central Bank, is the latest
in a long line of technocrats to be installed in the prime minister’s
office. That is hardly ideal. Unelected
heads of government are in principle a snub to
democracy. They are often bad at communicating
with the public. Their elevation can play into
the hands of populists, who will always claim
that the elites are conspiring to do down the
masses. When the prime minister in question is
a former international banker, the demagogic
slogans practically write themselves.
Still, Mr Draghi commands the support of all Italy’s main parties,
with the sole exception of the Brothers of Italy, an outfit with
neo-fascist origins, which will no doubt snipe dangerously from
the sidelines. Mr Draghi is more than just a technocrat; he also
has considerable political and diplomatic skills, as he showed
when shepherding the euro through its crisis a decade ago. He
will need them.
Previous governments have often broadly agreed about what
has to be done to rescue Italy from its chronic malaise. It is one of
the worst places in the European Union in which to do business,
owing to a sluggish and erratic judicial system, a weakness for
red tape and a tax system that discourages job creation. Government
subsidies have failed to correct the deep structural imbalance
between the prosperous north and the mezzogiorno, Italy’s
south, one of Europe’s least prosperous regions. All these things
need fixing, but a series of weak, cash-strapped coalition governments
have made little progress. Mr Draghi has a chance to do
better. For now, at least, he has a huge majority in parliament.
He will also have plenty of sugar to help the unpleasant medicine
go down. Thanks to a