Is Putin main beneficiary of Draghi's exit?

By Imran Khalid

The resignation of Italian Prime Minister Mario Draghi, after his fractured ruling alliance melted away due to infighting, is undoubtedly a major jolt for the political spectrum of this European country, which has been witnessing one of the world's longest periods of volatility in the postwar era ― 19 prime ministers in 33 years.

Mario Draghi, the highly respected former European Central Bank chief, admired for his instrumental role in saving the single currency in the Eurozone crisis of 2012, certainly brought a totally new element of stability, maturity and calmness into Italian politics with his trade-mark tranquility and gravitas when tackling Italy's problems.

Two kinds of reactions are being witnessed over Draghi's sudden departure: Inside the country, recent opinion polls suggest that the overwhelming majority of Italians want Draghi to stay in office to steer Italy through its economic and geopolitical challenges, while outside the country, Russian President Vladimir Putin is quite happy with the removal of Draghi from the scene which has paved the way for pro-Moscow political elements in Italy to potentially gain power.

Italy is among a select-few of Western European countries, where pro-Russia political forces hold reasonable clout and Putin needs such supportive voices in the wake of the invasion of Ukraine. The dissolution of Italy's government is considered a major win for Putin in Western Europe.

Draghi has acted as major resistance to Putin's influence in Italy and Europe, while his other three coalition partners ― who are responsible for Draghi's downfall ― are considered to be sympathizers of the Russian dictator. Draghi's exit has emerged as a plus point for Putin, but still, a lot depends on the results of the forthcoming elections in September.

Mario Draghi was the first person in decades who brought the concept of "somewhat stability" into Italian politics and the economy and things appeared to be heading in the right direction for the country. There are ample reasons to believe that Draghi's stint was scuttled indirectly by Putin through his "friends" in the ruling alliance who refused to support Draghi in the no-confidence motion.

In early 2021, a national unity government ― comprising the center-left Democratic Party, the anti-establishment populist Five Star Movement, populist firebrand Matteo Salvini's hard-core nationalist Lega, and former prime minister Silvio Berlusconi's Forza Italia ― was formed under the premiership of Draghi, who steered Italy through its COVID -19 crisis very well.

His cross-party coalition was quite successful in steadying a faltering vaccination drive and managed a vigorous economic rebound from 2020's GDP reduction of 9 percent as well as convinced Brussels to approve 200 billion euros to support his economic reform agenda from the EU COVID recovery funds. However, he appeared increasingly frustrated by the complexity of coalition negotiations over his proposed reforms, which included updating property registers to improve tax collection, auctioning lucrative beach concessions and a new competition law.

His aggressive stance against Russia's invasion of Ukraine was also one of the key reasons for cajoling his coalition partners to desert him. Though there is no concrete and tangible evidence to corroborate the rumors that Moscow was pulling the strings to ensure the collapse of the Draghi government, it is also a fact that Putin is the major beneficiary of this episode in Italy.

In the 17 months of his stint as premier, Mario Draghi, who has been asked by President Sergio Mattarella to continue his work as the caretaker prime minister until the Sept. 25 elections, has proven his mettle as a brilliant statesman who has been able to keep the Italian economy on the right track against the backdrop of the pandemic and then unexpected fuel and food crises due to a war on the eastern fringes of the European continent.

The credit goes to Draghi's intense efforts to swiftly find alternative sources of gas to reduce dependence on Russia. After the Russian invasion of Ukraine in February, Italy secured increasing supplies of Algerian gas, which could also be channeled further northwards to Germany. The political crisis and departure of Draghi does not bode well for Italy at this time when the global economy is passing through a highly uncertain and volatile phase.

The most urgent matter is the approval ― in the budget ― of the reforms, the European Commission is demanding in exchange for a promised 200 billion euros in grants and loans from the EU's pandemic relief fund. That process will now be delayed until the new government takes charge.

All eyes are now on the Sept. 25 elections.

Recent surveys indicate that an alliance of Italy's right-wing parties is likely to form the next government. Salvini's Lega and Berlusconi's Forza Italia will be able to muster a handsome number of seats, however, the nativist Brothers of Italy is predicted to grab a major chunk, which means Italians may have Giorgia Meloni as their first female Prime Minister.

Meloni, 45, a staunch right-winger, has limited experience in government. She served for three years as Youth Minister in the Berlusconi government in 2008. This is the only government experience she has ever had. Being a founding member of the intensely anti-immigrant Brothers of Italy, she is expected to keep an anti-migrant stance as one of the key pledges of her election campaign.

She is not in a position to stick to her nuanced approach toward the EU, in the wake of the Ukraine crisis and Italy's excessive dependency on the financial support coming from EU funds. She has been an advocate of amendments to EU treaties so that Italian law could supersede the EU's rules and regulations. Though she has never campaigned for an exit from the EU as such, she has, nevertheless, been a big critic of the bureaucratic tendencies of Brussels.

However, at this stage when Italy desperately needs Euros from the EU, she will have to profoundly tone down her EU rhetoric of the past. Her Euro-skepticism will surely be placated to accommodate the growing sympathies among Italian voters toward the EU after the announcement of the relief package of 200 billion euros. But Meloni will have to take some bold and unpopular decisions with regard to the competition laws and tax rules to accommodate the conditions of the EU to avoid any cuts in EU funding.

Dr. Imran Khalid (immhza6@gmail.com) is a freelance contributor based in Karachi, Pakistan. The views expressed in the above article are the author's own and do not reflect the editorial direction of The Korea Times.