Promotion with full marks for the Italian premier Mario Draghi the Cnbc writes that speaks of A in the report card, even if the powers of the former ECB number one today at the head of the tricolor executive are in a certain sense fading. Is the Draghi era approaching sunset?
Dragons promoted by the experts
“Thanks to European solidarity and Italy’s ability to effectively manage the pandemic, the Italian economy is growing faster than at any other time since the beginning of this century. The Italian GDP will return to pre-crisis levels by the middle of next year “. These are the words of the President of the European Commission Ursula von der Leyen just a few weeks ago. If final GDP readings for 2021 are only expected next month, quarterly data points to an economic rebound in Italy over the course of the year.
Italy has suffered a massive economic shock due to the coronavirus pandemic, but its prospects now look much brighter with economists praising Prime Minister Mario Draghi’s work for much of this new economic stability writes on broadcaster Silvia Amaro. reporting the statements of Gilles Moec, chief economist of the AXA Investment Managers group.
“” In 2021, Italy did quite well (…) There is a leader and a sense of direction “.
Draghi swore how Prime Minister of Italy almost a year ago, in February 2021, leading a government made up of politicians from different parties and some technocrats. His goal was to give stability to the nation at a time when i traditional politicians they could not agree on how to invest EU recovery funds and mitigate the economic shock of the pandemic. And he succeeded, according to economists.
“Despite a deceleration in services, quarterly growth in the [quarto] quarter should have been enough to ensure an average GDP growth reading of 6.3% in 2021, ”ING senior economist Paolo Pizzoli said in a research note Thursday. However, there are two main structural reforms and a key factor that have eased some of the economic pressures during Draghi’s tenure so far, he argued. Guidogiorgio Bodrato, economist from Berenberg. Bodrato cited the judicial reform – approved in September and which could improve Italy’s attractiveness for foreign investors – and the changes to the public administration to speed up its efficiency.
“Draghi’s most important economic result was the drafting of the PNRR: a detailed multi-year commitment of investments and reforms to be followed by the government between now and 2026”, continued email Luca Pennarola, European economist at BNP Paribas. “This means that any government that rises to power in the next few years will have to follow Draghi’s script to ensure access to EU funds,” he added.
However, economists point out that the available data still does not fully reflect the improvements, as there is some lag between policy implementation and economic impact.
The future challenges of Italy
Now that Italy is about to choose a new President of the RepublicWith the elections at the end of this month, there are question marks as to whether this stability and economic performance could be undermined in some way.
This is because Draghi himself is among the candidates to the presidency, which would open the door for a new prime minister and potentially early elections. “Despite the improvements, Italy is” still in a complicated position, “said Moec who noted that with interest rates expected to rise this year, it could be increasingly expensive for the Italian government to tap into the markets for help her recovery. This is a significant problem given that Italy has one of the highest heaps of debt in Europe.
Furthermore, the current government has one expiration date in 2023 with new legislative elections. So the question of who will replace Draghi, if not imminent in the wake of the presidential vote, will inevitably re-emerge in a couple of months.
Meanwhile, there are already some signs of friction within the current government. Among these, the lack of unanimity on the need to introduce the mandatory vaccinations in Italy.