When in 2011, the then President Napolitano asked Mario Monti to form a new government of technocrats, Italy wasn’t very far from its own version of a financial crisis. Credibility in Europe and in the financial markets was near record lows, and the new Prime Minister assumed his role by promising an economic version of “blood, sweat and tears.” His job was to cut costs, increase taxes, reduce the budget deficit and therefore resume Italy’s access to financial markets, a very delicate matter for a country with one of the highest Debt/GDP ratios. Professor Monti succeeded to a certain extent, but his government only lasted two year. By that time his political capital was eroded by having to administer such bitter medicine.
Roughly ten years later, President Mattarella gave his approval a few days ago to another professor, another Mario, the Central Banker emeritus Mario Draghi. While certain circumstances are similar, their mandate couldn’t be more different. Whereas Monti had to cut the budget deficit and start reducing the national debt, as a proportion of GDP, Mario Draghi’s mandate is twofold. He will need to ensure that Italy gets its full allocation of the recovery moneys, which have already been generously earmarked for Italy, and even more importantly, he will have to ensure that those funds are spent well, so that from the ashes of the crisis, Italy can find its renaissance. Both Marios’ jobs were and will be challenging, but the big difference is that Draghi will put money in people’s pockets, whereas Monti had to do the opposite. If Italy ever had a chance to emerge from nearly two decades of stagnation, Mr. Draghi is its best chance.
Mr. Monti’s political career ended quickly with a failed election and he soon returned to academia. Mr. Draghi probably has no intentions at all to stay in politics. He has a mission to do, and he has the skills and the credibility to get it done in the two years before Italy’s next general election.