DRAGHI IS THE PROBLEM, NOT THE SOLUTION

Here's my take on the upcoming Mario Draghi government in Italy [thread]

1) Draghi is part of that generation of technocrats that in the early 90s embraced the concept of "vincolo esterno" (external constraint). https://unherd.com/2021/02/mario-draghi-is-no-saviour

2) The idea was that only by “tying the hands” of government via a political-economic straitjacket — i.e. Maastricht/the euro - could they hope to achieve the neoliberal reforms for which there was very little popular consensus.

3) Draghi, director general of the Italian Treasury at the time (he negotiated the Maastricht Treaty in that capacity), was a vehement proponent of austerity and the privatisation of Italy’s state-owned companies - and of the vincolo esterno.

4) As Featherstone and Dyson note, “[a]s a technocratic, non-party minister himself, in his soul [Draghi] believed in EMU as a vincolo esterno”, without which “the politicians could not be relied upon to accept long-term budget discipline”.

5) The concept of “technical government” is a by-product of the vincolo esterno, as the latter creates a "state of exception”, whereby the normal democratic mechanisms may need to give way to “non-political” (i.e., “technical”) governments tasked with “getting the job done”.

6) Furthermore, politicians are often unable to solve the socio-economic tensions created by the straitjacket of the vincolo esterno, and thus they turn to technocrats to resolve the impasse, by having them implement the measures the parties don’t want to take responsibility for.

7) It’s no coincidence that the era of the technical governments began in the early 1990s, following Italy’s signing of the Maastricht Treaty (negotiated, as mentioned, by Draghi).

8) The first technocrat-led government, led by former governor of Italy’s central bank, Carlo Azeglio Ciampi, was formed in 1993 and inaugurated the first round of mass privatisation of state assets. Just a few years later, it was the turn of Lamberto Dini (1995 and 1996).

9) The fall of Berlusconi’s last cabinet, in 2011, saw the ushering in of another technocrat, Mario Monti, who proceeded to administer a devastating austerity “cure” recommended by Brussels.

10) Mario Monti's appointment was largely a consequence of the decision by the newly-appointed president of the ECB – yes, Mario Draghi again – to stop the purchases of Italian government bonds, which caused Italian interest rates to skyrocket. A soft coup.

11) In short, in his capacity as director general of the Treasury and then president of the ECB, Draghi oversaw mass privatisation and austerity, and more in general the country's shackling to the euro straightjacket, which have all had a deleterious impact on Italy.

12) To conclude, Italy’s crisis must be regarded as a crisis of the post-Maastricht order of Italian capitalism, and more in general of the logic of the external constraint based upon privatisation, fiscal austerity and wage compression that Draghi has always championed.

13) If that is the case, then it is folly to think that Mario Draghi — literally the bodily incarnation of the political-economic model that has ruined Italy — can represent a solution. /END

@unherd