Italy Welcomes New Prime Minister

On February 13, 2021, Mario Draghi was sworn in as Italy's prime minister, ending weeks of political strife in Rome. Although the so-called 'Super Mario' has much to celebrate, his new unity government faces difficulties both at home and abroad. Deep divisions in Italian society, COVID-19, and economic struggles are sure to cause significant political instability in the medium to long term.



Background

As previously reported on The Intelligence Ledger's Threat Map, Italy's political crisis began January 13, 2021, when a moderate party publicly reversed its support for Giuseppe Conte's government. This resulted in Conte's resignation on January 26, as he believed he would be able to be reappointed to the post of PM with a stronger majority in Parliament. This was not to be. Right, center, and leftist parties all began voting in favor of a Draghi led government, thereby crushing all of Conte's hopes of re-election.


Assessment

Mario Draghi won international acclaim in 2012 after promising to do, "whatever it takes" to save the euro from collapse. Draghi kept his promise, and was a critical player in the quest to solve Europe's debt crisis. Despite his reputation as a problem solver, he faces a plethora of challenges domestically and abroad that may prove too difficult to overcome.


According to public reporting, Draghi will attempt to accelerate Italy's vaccination program, as the nation has fallen woefully behind its European counterparts due to logistical issues. The success or failure of this initiative will not only determine Draghi's future political viability, but the future viability of Italy's economy.


Draghi has also announced his intention to propose reforms targeting the nation's tax code, public administration, criminal justice system, and education institutions. Getting these reforms approved, however, is a different story. The new PM is supported by right- and left-wing parties with opposing ideologies and policy beliefs. As such, any policy that proceeds through parliament will likely be watered down and ineffective.


Importantly, Draghi will oversee the modernization of the Italian military. With new threats in the Mediterranean, namely those from Libya and Turkey, the new government is keen to ensure Italy has the power to exert its will upon regional rivals.


Last, but far from least, is Italy's struggle with debt. As the new leader of a nation that is Europe's second largest debtor, Draghi has a lot of work to do in order to improve Italy's geoeconomic situation. COVID-19 has only compounded issues, with an economy that shrank by 8.8% in 2020 alone. The prime minister is likely to rely upon financial grants and loans from the European Union to support his struggling economy, as evidenced by actions already taken by the new government to gain access to $200 billion in immediate support for Italy.