Wide range of political support, wide range of economic attack

Mario Draghi? No, thanks!

The political establishment has put differences aside to support a government that is committed to making workers, pensioners and the petty bourgeoisie pay for the Covid-19 crisis, reports Toby Abse

The new Italian administration headed by prime minister Mario Draghi is a coalition consisting of all the major parties, including not only the rightwing Five Star Movement (M5E) and Liga, but the former ‘official communist’-dominated Democratic Party (Partito Democratico), and the social democratic Liberi e Uguali.

Over the last couple of weeks many mainstream commentators have described Draghi as a Keynesian, as an opponent of neoliberal austerity and so forth.1 This is nonsense. The fact that in July 2012 Draghi declared that he would do “whatever it takes” to save the euro, and that as president of the European Central Bank he subsequently instituted a programme of quantitative easing - which involved the ECB purchasing government bonds (issued by Italy and other European states) worth a total of €3,000 billion between March 2015 and the end of 2018 - does not make him a friend of the working class and the poor.2 These measures were needed to save European capitalism as a whole, even if narrow-minded, ultra-nationalistic German ordo-liberals opposed them and loathe Draghi for having pursued them.

Draghi’s real world-view, which can in no sense be called that of a “liberal socialist” (!), as he has described himself on more than one occasion, can be seen in his February 23 2012 interview with the Wall Street Journal - a truly chilling document, which has not received the attention it deserves. Draghi declared that “what is being outlined in Greece is a new world that will abolish the old regime and free us from the whited sepulchres … the welfare state is dead”.3 In case anybody imagines that this was an off-the-cuff outburst (not that taciturn central bankers make the off-the-cuff remarks more typical of garrulous politicians), more than three years later, in July 2015, he put his theory into practice and delivered the killer blow to Alexis Tsipras’s already wounded Greece by cutting off emergency loans to its banks.


It is true that Draghi originally studied economics in Rome with the Italian Keynesian, Federico Caffè, before studying for a PhD under the direction of another Keynesian, Franco Modigliani. He may well have expounded Keynesian theories as a young economics professor, but what concerns us, and will concern the Italian masses in the coming year or two, is the path he consistently pursued from 1991 onwards in his 11 years as director general of the Italian treasury under nine different governments - led by figures ranging from Giulio Andreotti, via Giuliano Amato, to Silvio Berlusconi and Massimo D’Alema.

In the summer of 1992, during the crisis of the exchange rate mechanism, linked to the European monetary system, Draghi was aboard the Royal Yacht Britannia - in the company of Carlo Azeglio Ciampi, who was then head of the Bank of Italy, subsequently Italian prime minister and finally president of the Italian Republic; and the renowned Italian economist, Beniamino Andreatta. As part of this trio, Draghi helped devise the Italian privatisation programme, which in the course of the 1990s saw the sale, at giveaway prices, of almost every Italian state-owned or predominantly state-led enterprise. This fire-sale was supposed to be a brilliant means of reducing Italy’s large national debt, which had indeed ballooned in the course of the 1980s, when the corrupt prime minister, Bettino Craxi, endorsed a bizarre clientelistic variant of Keynesianism.4

The privatisations proved to be an utter failure in terms of their ostensible objective, as Italian national debt tripled over the next 10 years. But they provided a massive windfall for a large array of Italian and non-Italian capitalists - including the Benetton family, who got their hands on many motorways and airports.

No sooner had Draghi left the Italian treasury than he went to work for Goldman Sachs (2002-05), gaining the best-paid job of his life - which, it has been alleged, involved a considerable conflict of interests, since this American merchant bank had numerous dealings with the Italian state, Draghi’s previous employer. In 2005, he returned to Italy to head the Bank of Italy on Berlusconi’s recommendation. After six years in this post, he went to Frankfurt to become head of the ECB.

Some have held him responsible for the ignominious collapse of the centuries-old Monte dei Paschi di Siena bank, through his endorsement of a very ill-advised merger with a Venetian financial institution, which his own Bank of Italy officials had already found to be in serious trouble. Nonetheless, by and large his record as a central banker has been a very successful one, and gained him the admiration of his peers in international high finance.

However, it is worth pointing out to those who see him as a friend of Italy and the Italian people that on August 5 2011, soon after the confirmation of his appointment at the ECB, but while he was still head of the Bank of Italy, he signed (together with the outgoing ECB head, Jean-Claude Trichet) a notorious letter to the Italian government, demanding massive spending cuts and a programme of austerity. The letter called for “privatisations on a large scale” of local services and the replacement of national level wage settlements by “agreements at the enterprise level in a manner that adapts wages and working conditions to the specific needs of the enterprise”. In addition, the letter specifically called for further cuts to Italian pensions. Whilst the reckless Berlusconi chose to ignore these threats until the ‘spread’ (the gap between the interest rate on Italian and German 10-year government bonds) soared out of control in November 2011, these foul measures - particularly the attack on pensions - were soon to be implemented by Mario Monti’s technocratic government (2011-13).

Draghi is also widely believed to have inspired Matteo Renzi’s Jobs Act (2014), which destroyed the protection against arbitrary dismissal, given to workers by article 18 of the Workers’ Statute of 1970. More recently, Draghi’s speech to a ‘Meeting’5 of the reactionary, fundamentalist Catholic Comunione e Liberazione (CeL) movement in August 2020 drew an ominous distinction between “good debt” and “bad debt”, and argued for an end to “subsidies”. The language of the speech was somewhat ambiguous, so it was impossible to be sure that the subsidies Draghi referred to were measures like the ‘Citizens’ Income’ of the rightwing Five Star Movement (M5S), the extended cassa integrazione (roughly equivalent to ‘furlough pay’) scheme of the second Conte government, or its emergency grant to restaurant and bar owners and shopkeepers hit by Covid-related restrictions, but Confindustria (the Italian CBI) certainly interpreted the speech in the latter way.

Even more recently, the December 2020 report of the Group of 30 (on whose management committee Draghi sat) stated that it was necessary to “permit market forces to guide, at least partially, future economic support” and to “reduce the extent and volume of the support that has characterised economic policy in the first phase of the pandemic”. At a presentation of this report, it was suggested that, as a result of the pandemic, around 20% of Italy’s enterprises would no longer be viable, with the clear implication that the state should let them go under.


In the light of all this, it is hard to disagree with sociologist Domenico De Masi’s statement that “in February 2021, the last implicitly social democratic government gave way to the first completely neoliberal one”.6 The fall of Giuseppe Conte’s second government (September 2019-January 2021) was no accident. It was brought about by that unpopular hireling of Mohammed bin Salman, Matteo Renzi,7 leader of Italia Viva - a small rightwing split from the Partito Democratico. But Renzi’s antics would never have received such indulgence in the mainstream media if the Italian establishment had not long ago decided that Conte - the most popular of Italian politicians in every opinion poll between the start of the Covid epidemic in early 2020 and his resignation in January 2021 - had to be overthrown.

One of the key moments in the escalating campaign against Conte was the takeover of the relatively large-circulation, ‘centre-left’, national daily La Repubblica by the Elkann/Agnelli family at the end of April 2020. As soon as John Elkann was in control of the paper, he sacked the editor and replaced him with a reliable stooge, Maurizio Molinari, who had previously edited the Agnellis’ Torinese daily, La Stampa.8 The Repubblica journalists held a brief protest strike in support of the sacked editor, who was clearly very popular with his staff, and a number of long-standing contributors quickly went elsewhere - most notably Gad Lerner, a Lebanese-born Jew, who detested Molinari’s enthusiastic support for Binyamin Netanyahu.

Much more recently, the world-famous anti-Mafia polemicist, Roberto Saviano, has opted to write for the centre-right Corriere della Sera instead, and, given the sales figures of his books and his income from film and television adaptations, it seems reasonable to suppose his motive was not financial. In any event, from April onwards La Repubblica attacked Conte on a daily basis, and from early December seemed to carry an obsequious interview with either Matteo Renzi or one of his Italia Viva clique almost every day.

Of course, there were a lot of hostile editorials and columns attacking Conte in the Corriere della Sera too, but the centre-right newspaper was rather less strident than the one traditionally identified with the Partito Democratico (PD), and its immediate non-communist predecessors, the Partito Democratico della Sinistra and the Democratici di Sinistra, as well as with the anti-Berlusconism of 1994-2011.9 For these journalists, Conte could never get it right - one moment, he was too dictatorial; the next, indecisive and lacking leadership skills. He was simultaneously too prone to centralise decisions and too keen on postponing them. In short, he was subjected to the kind of treatment reminiscent of British press campaigns against Ed Miliband and Jeremy Corbyn.10

I am not claiming that Conte was particularly leftwing. After all, he was the same man who in his first government (June 2018-August 2019) had colluded in many anti-migrant measures originating with Matteo Salvini. However, Conte’s response to the Covid emergency was essentially a social democratic one.

Firstly, he considerably extended the use of the cassa integrazione - traditionally a form of temporary layoff pay, used by companies in difficulties to avoid immediate redundancies. He transformed cassa integrazione into the equivalent of the UK ‘furlough pay’, and soon shifted the burden of its financing from employers to the state. He also extended its duration on a number of occasions (currently it is due to run out on March 31). These extensions were in part a response to trade union pressure, including strike threats by Maurizio Landini’s leftwing union confederation, the CGIL, and were disliked by Confindustria (the Italian CBI) - whose new leader, Carlo Bonomi, is much more of an anti-union hawk than his predecessor.

Secondly, Conte imposed a block on sackings, which again runs out on March 31. Inevitably, employers have found loopholes, and at least 400,000 people were sacked last year, but without the attempted block, which employers hate, it would have been millions. Thirdly, he imposed a block on evictions of tenants unable to pay their rent - once again this expires at the end of March. Fourthly, he allowed the extension of the ‘citizen’s income’ - devised by the rightwing M5S during his first government - to cover a wider range of claimants.11 Fifthly, he created a new ‘emergency income’ to cover many who did not qualify for the ‘citizen’s income’. Sixthly, he gave grants (ristori) to compensate restaurant and bar owners, shopkeepers and other petty bourgeois for their massive loss of income due to Covid restrictions.

Whilst there were some groups who fell outside the safety net, as well as serious delays, especially in the early months of the pandemic, in processing the payments, and some people who, rightly or wrongly, claimed that the compensation they received was inadequate,12 the overall thrust of Conte’s policies was social democratic, not neoliberal. Of course, he tried to mediate between the classes and made concessions to large employers too - notably a massive, unnecessary and unconditional loan to Fiat Chrysler Automobiles (for which FCA showed absolutely no gratitude, as should be obvious from the company’s leading role in the vicious press campaign against Conte). But the point is that even a mild social democratic response to the social and economic crisis caused by a pandemic in a country that never really recovered from the 2007-08 financial crisis is absolutely unacceptable to capital.


Draghi’s government will make workers, the unemployed, the ruined sections of the petty bourgeoisie, pensioners and private tenants pay for the crisis. Therefore, it is hard to understand the willingness of both the PD and M5S to participate in this government, and therefore to face the predictable anger and despair of the popular masses by the time of the general election, scheduled for early 2023.

The politician who had the clearest grasp of the underlying dynamics of the current situation is unfortunately Giorgia Meloni, the leader of the neo-fascist Fratelli d’Italia. The FdI is already growing in the opinion polls, becoming the third most popular party after the Lega and the PD (and narrowly ahead of M5S). At the 2018 general election, it scored a mere 4.4% - way behind the Lega and Forza Italia. By the European elections of June 2019, it had climbed to 6.5%, but its growth over the last year and a half is quite astonishing - it scored 16.9% in a recent opinion poll.13 By remaining the only major party to refuse to back Draghi, the FdI will gain the support of a wide array of the discontented, once the current honeymoon with Draghi - who is getting a 70% approval rating due to the hagiographic coverage in the media and the complicity of most of the political parties - wears off.

As far as the PD is concerned, Gramsci’s pessimistic assertion that “History teaches, but she has no pupils” certainly applies. Despite its origins in the ‘official communist’ movement, the PD (or its immediate predecessors, the PDS and the DS) has repeatedly backed technocratic or semi-technocratic governments led by bankers - Carlo Azeglio Ciampi in 1993-94, Lamberto Dini in 1995-96 and Mario Monti in 2011-13. All these governments have not only attacked workers’ rights in terms of wages, job security, living standards and pensions: they also reduced any residual propensity of manual workers to vote for the degenerate heirs of the Italian Communist Party - instead driving them into the arms of the racist demagogues of the Lega, M5S and FdI. A party like the PD, which can only get support from more liberal sections of the educated middle class, is heading for electoral suicide.

To be fair to PD leader Nicola Zingaretti, he has some awareness of this, and sought to take the party back towards social democracy and some links with the trade unions, whom former leader Matteo Renzi had alienated. However, the overwhelming dominance of former Renzians in the party’s parliamentary group means that its feeble attempts to argue that the PD should only give “external support” to, rather than actually participate in, a Draghi-led government that includes the reactionary and racist Lega, were drowned out by neoliberals only too keen on this disgraceful lash-up.

M5S, as a newer formation than the PD, may well be heading for the rocks rather more rapidly. In the 2018 general election, M5S scored 32.7%. By the European elections of 2019, its vote had nearly halved to 17.1%. It now stands at 15.2% in the opinion polls, below the FdI - and it must be remembered that it has up till now benefitted from its association with Giuseppe Conte, who was far more popular than either Beppe Grillo or Luigi Di Maio. In the course of this parliament, dozens of its deputies and senators have either been expelled or deserted it for a variety of other parties. Its original electoral breakthrough in 2013 was because of its opposition to Mario Monti’s government. It was born as an anti-establishment party that opposed all the political class (La Casta) as well as bankers and technocrats.

Draghi is a much purer example of what it once opposed than Monti was. The latter was arguably more of an academic and/or bureaucrat than a lifelong representative of finance capital at its most ruthless. Unsurprisingly, despite the strong endorsement from Beppe Grillo, Luigi Di Maio and M5S’s acting leader, Vito Crimi, and despite an extremely leading question, the online referendum of members on whether M5S should join a Draghi government produced a large minority of 40.7% who were against. The 59.3% ‘yes’ to Draghi was far less than the 94% approval in a similar referendum on governing with the Lega or even the 79.3% who supported governing with the PD.

Liberi e Uguali’s obvious deep unease at joining a government along with the racist Lega was not sufficient to pull back it from the brink. The only coherent position on the Italian left is that epitomised by Rifondazione Comunista’s slogan: “Mario Draghi? No, thanks!”

  1. Sadly, this line has been swallowed by some who, one would have thought, had greater critical faculties and stronger anti-establishment instincts. This can be seen in the reaction of important figures on what remains of Italy’s parliamentary left - the social democratic Liberi e Uguali (which at the time of the 2018 Italian general election expressed great enthusiasm for Jeremy Corbyn). Maria Cecilia Guerra, under-secretary for economics in the second Conte government, in her interview with the Communist daily Il Manifesto (February 5), dismisses a number of possible objections to Draghi raised by the interviewer.↩︎

  2. I am aware that there are technical economic arguments to the effect that QE is not the most efficient method of avoiding a slump, but that is not my point here.↩︎

  3. This was translated by myself from Italian, as I was unable to find the original English text.↩︎

  4. This culminated in the hugely wasteful expenditure surrounding Italy’s hosting of the 1990 World Cup.↩︎

  5. This annual event, given the English language name of ‘Meeting’, has for some years been regarded as central to Italian political and economic life, attracting famous speakers with no allegiance to Comunione e Liberazione’s particular dogmas. In recent years, CL has in any event been more interested in using ‘third sector’ front organisations to build up an empire in private healthcare in Lombardy and Lazio than in combating progressive trends in the Catholic Church. Its key role in weakening public health provision in Lombardy has, of course, played a large part in the region’s exceptionally high Covid-19 death rate.↩︎

  6. Il Fatto Quotidiano February 5 2021.↩︎

  7. In the middle of the political crisis that Renzi had precipitated, he flew off to Saudi Arabia to give a so-called conference, which seemed in practice to amount to a fawning ‘interview’ with Prince Mohammed bin Salman. He compared the prince’s urban plans with the Florentine Renaissance, and expressed his envy at the low cost of labour in Saudi Arabia - an apartheid state, in which more than half the workforce is made up of 11 million migrant workers with no rights at all. Renzi was paid $80,000 and flown back to Italy on the prince’s private plane, in order to meet the Italian president’s timetable for consultations with party leaders.↩︎

  8. There is no question of there being a financial or economic motive behind the takeover. Newspaper circulation in Italy, always below UK levels, is declining, as internet use grows, and Elkann quickly sold off a chain of local newspapers, such as the Livornese Il Tirreno (which had previously been attached to the La Repubblica/L’Espresso newspaper group), since they were of no political use to him.↩︎

  9. Obviously, Repubblica’s anti-Berlusconi stance was in part a product of a feud between its previous owner, Carlo De Benedetti, and Silvio Berlusconi. This resulted from a court case in which Berlusconi had successfully bribed the judges to get a verdict against his economic rival. Nonetheless, it marked Repubblica out from the pack of major newspapers and helped maintain a committed readership. I suspect that many of its older readers have been nauseated by the depiction of Berlusconi as a ‘loveable rogue’ in the days since he expressed willingness to join Draghi’s government.↩︎

  10. Even Conte’s understandable desire to keep the oversight of Italian intelligence in his own hands was twisted to give the impression that he was an agent of the Trump administration - given that Conte’s quarrel with Matteo Salvini in August 2019 was partly due to Salvini’s refusal to give honest answers to parliament about alleged Russian funding of the Lega, Conte could not be branded as an agent of Putin - an accusation that a fanatical Atlanticist like Molinari would probably have preferred.↩︎

  11. Whilst this scheme was originally closer to the jobseeker’s allowance or universal credit than to a universal basic income, since there are few new jobs for claimants to be pushed into, such objections are currently irrelevant.↩︎

  12. The Italian petty bourgeoisie is probably more inclined to dodge tax than its UK equivalent, and doubtless some have no compunction about swindling the state during the pandemic, but there can be no doubt that very many shops and small businesses have gone bankrupt over the last year.↩︎

  13. Published in La Repubblica (February 7).↩︎