Thursday, June 23 2022

Three years ago, international investors nervously watched the entry into office in Rome of a new radical government, whose members had openly flirted with the idea of ​​Italy’s exit from the single European currency.

This coalition – formed between the Anti-Establishment Five Star Movement and the Anti-Immigration League Party of Matteo salvini – attacked Brussels and pledged to increase Italian state spending. Some saw it as an existential threat to the euro area itself.

Now the League, still led by Salvini, has returned to power, but inside the
government of national unity led by Mario Draghi – who, as former president of the European Central Bank and savior of the single currency, is the personification of pro-European technocracy.

The shift from the League of Populist Agitators to apparent pro-Europeans can seem somewhat confusing. However, the key to understanding this transformation is Giancarlo Giorgetti, Minister of Economic Development and number two in the party.

While Salvini is better known outside Italy, Giorgetti – a 54-year-old veteran who has been an MP since 1996 – is powerful in his party and has been instrumental in his change of strategy.

In the current coalition, Draghi asked him to play a crucial role in shaping Italy’s future industrial policy, within the framework of the national investment and reform plan. Salvini, on the other hand, does not hold any ministerial role.

Giorgetti also openly disagreed with Salvini on important political issues, such as compulsory vaccines, and serves as a counterweight to Salvini’s more radical instincts. He argues that the Draghi reforms will be key to reversing more than two decades of economic stagnation.

“Above all, we are trying to build a safe regulatory framework for investment,” he says. “We are completely changing the way Italian public administration works. We are also making enormous efforts to reform the judicial system, speed up trials and be faster and more efficient ”.

Economic Development Minister Giancarlo Giorgetti (left) believes the Draghi reforms are essential to reverse Italy’s economic stagnation © POOL / AFP via Getty Images

Giorgetti is optimistic that Draghi’s plans will work. Alongside the former CEO of Vodafone and Minister of Innovation Vittorio Colao, he launched a plan to accelerate the deployment of high-speed internet technology throughout Italy and to launch a national cloud computing program.

Giorgetti is also outspoken when he recognizes that Italy is in a rare moment of stability. “We are in a particularly favorable situation in terms of borrowing costs,” he says.

Yet while Italy was far from alone in seeing its economy ravaged by the coronavirus pandemic, it differs from other major European countries in that it has no recent record of recovering from a crisis. . GDP today remains lower than it was before the 2008 global financial crisis. Why, then, will it be any different this time around?

Giorgetti argues that the fact that European fiscal rules allow the country’s government to invest in the future is just as important as Italy’s reform agenda.

Giancarlo Giorgetti © LORENZO MACCOTTA / CONTRASTO

“Over the past 20 years, we have paid the price for an austerity program and fiscal rules in Europe that have been more important than in other countries,” he said. “We can now be much more agile when it comes to investing. The impoverishment of countries is over. . . we can use our resources much smarter.

Just three years ago, Brussels criticized Rome for trying to marginally increase its budget deficit. Today, under Draghi and in the Covid-19 crisis, all constraints have been suspended.

“The image is different,” says Giorgetti. “What was once taboo is no longer a taboo”.

He believes that with Draghi at the helm, Italy can have a more powerful voice in European industrial and fiscal policy than in the past. “With the elections in Germany and France, Italy can be an important player in the making of the rules,” he said. “Under Draghi’s leadership, Italy can play a different role than before.”

Giorgetti embodies the more centrist and pragmatic wing of his party, rooted in its traditional northern Italian business base rather than Salvini’s anti-migration tirades and pan-Italian nationalism.

While Salvini has made himself known as a sovereignist for his “Italians first” rhetoric, as well as for his flirtations with Putin’s Russia, Giorgetti is explicit on the importance of Italy’s place in the EU and its commitment to NATO.

He believes in adjusting European state aid rules to allow countries to strengthen their industrial bases. However, on defense, he says Europe must continue to cooperate closely with the United States and, if Italy will always be collaborative, it must act in the interests of its own national champion companies, like Leonardo.

“I don’t think Europe can be independent from the United States in terms of defense policy, so we have to keep playing a game that is global,” he said.

Giorgetti also represents the fragility of political balances in Italy. Shortly after his interview with the FT, he told an Italian newspaper that he would be in favor of Draghi leaving his post and becoming president of Italy, paving the way for the holding of elections in the country. .

For now, Draghi’s personal plans remain under wraps. However, anyone betting on the country’s political future should also watch Giorgetti: the orientation of the Italian right may depend on the balance of power between him and Salvini within the League.


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