Enter the Draghi: It’s the COP26 co-host’s time to shine

This weekend and for the next fortnight it is showtime for Mario Draghi, Italy’s unelected Prime Minister. Not that he would choose that expression, I suspect. But on 30-31 October he is chair of the G20 summit in Italy. He then moves to the COP26 Climate Summit in Glasgow, where he is co-chair of the meeting along with Boris Johnson. The Italians have been given little credit for their role in the summit, and the annoyance in Rome is palpable.

The contrast in style and outlook between Draghi, 74, and Johnson is pretty glaring. Both are highly intelligent public performers, though in a very different way. Draghi, Jesuit-educated, has spent a lifetime in finance and banking, public and private, in Italy, at the EU level, and in the US at the World Bank and with Goldman Sachs.

He is now proving a surprising success as Prime Minister, since he was given the emergency commission to head a coalition of politicians and technocrats to tackle Italy’s toxic crisis compounded by Covid-19 and a pretty dreadful backstory of stagnation and debt.

His main aim is to regenerate Italy’s economy and bring in some much needed reform. He is tackling the creaking justice system – the law’s delay is an outrageous euphemism for the way many of the country’s courts work. He is also tackling the gender imbalance – especially at the higher levels of the professions and public service. (It is even rumoured that the next Italian ambassador to London is to be a woman for the first time).

Unlike previous bankers turned prime minister, Carlo Azeglio Ciampi and Mario Monti, Draghi has said that he doesn’t want to run for elected political office when his current mandate is up – on 1 May 2023 at the latest.

His main task is the distribution of the €200 billion rescue funds and loans, principally from the EU pot. He has set himself  around two years for the main job to be done – he says he doesn’t want to see elections until the full term of the present parliament is up in Spring 2023.  He is suggesting that then, like Cincinnatus in Ancient Rome, he will return to his plough.

He will then be 76 – and he may find that his country, Europe and the global economy still need his services.

Not that all is completely rosy in the Draghi prospectus. An old ghost has come back to haunt him this week with the continuing imbroglio of the Monte dei Paschi di Siena, Europe’s oldest merchant and trading bank. In recent times it has been a byword for political jobbery and incompetence. This week a sale to UniCredit Spa fell through – and Draghi has to authorise an injection of around €3bn to keep the bank alive. This in addition to €18 billion of rescue funds it has swallowed over the past 13 years or so.

It is a familiar story to Mario Draghi, and one he is well equipped to address. The surprise of the past six months is other skills he has shown in handling the machinations of Italy’s political parties, and is managing really difficult problems of hard power foreign policy, especially in the Middle East, East Mediterranean and North Africa, where Italy has vital interests.

“It is astonishing how he has pushed back both the right and the left,” observes Italian journalist Marco Niada. Matteo Salvini’s nationalist Lega, a partner in the Rome coalition government, suffered a serious setback in the recent crucial local and mayoral elections. So too with the leftist populist 5 Star Movement, which the former prime minister Giuseppe Conte is trying to knock into shape.

Curiously, this has met with a revival of fortunes of the centre left Democratic Party, PD, under a resurrected former leader, Enrico Letta. It is not without irony that Letta has recently been elected to parliament at a by-election in, of all places, Siena – home of the aforementioned troubled and crumbling Monte dei Paschi di Siena Spa.

Draghi’s first foreign visit as PM was to Libya, where Italy has been working overtime to sort out the tangle of foreign proxies and patrons in the on-off civil war. The main effort of diplomacy has been with Turkey, Egypt, UAE and, to an extent, the Russians.

With Turkey the tango has had an intriguing choreography. In an off the cuff remark, Draghi said President Erdogan’s rule was that of a “dictator”. Erdogan called Draghi an “unelected prime minister” in what purported to be a leading democracy. The feathers flew. Yet in the recent spat which led to Erdogan expelling 10 European ambassadors, seemingly now on pause, Italy was not on the list. “It’s all immensely skillful,” says Niada. “Draghi is opening up to Turkey as a vital partner in the Mediterranean mix now. It is a very big back story.”

The trajectory of Mario Draghi and his policies will be intriguing both at G20 and COP26. Those policies could even prove decisive. G20, unlike G7, will talk money and how the $100bn funding on energy reserves envisaged in the COP programme will be facilitated. At the Glasgow summit, Draghi’s fiscal and financial skills will carry real clout – it’s not a department in which Boris Johnson is expected to display similar expertise.

The crucial area for debate will be between Draghi, John Kerry the US climate envoy, Mark Carney for the UN, possibly Barack Obama – who will be present – and the representatives of Narendra Modi and Xi Jinping. It matters not that these two world leaders may not put in a physical appearance on the Clyde next week – what their counsellors say and do will be crucial to the mitigation of environmental and climate degradation. These discussions may have to go on into further rounds next year. It won’t all be done and dusted in one go at Glasgow.

Draghi will be the leading voice among EU leaders. But he does not wish to be seen as the EU leader, in a way once claimed for Angela Merkel, and so eagerly aspired to by Emmanuel Macron.

In an intriguing essay in the International New York Times last week, Professor Helen Thompson, explained why no one is likely to dominate the EU scene as Merkel did. Draghi’s Italy is at odds with both the Merkel legacy and the Macron approach on China which broadly favour cooperation, and collaboration on occasion, as opposed to competition or even confrontation.

Draghi is pulling Italy away from its previous leaning towards Chinese investment in anything from fashion and furnishing, communications and selling interests in key hubs such as the ports of Trieste and Genoa. He is urging investment into and from America instead.

The implication from Helen Thompson’s article is that Draghi is unlikely to entertain Macron’s Napoleonic leanings despite the new attempts to form a special alliance with the Italian Republic.

One small inconvenience in the Draghi in-tray is that Italy’s parliamentarians of both houses are due to elect a new President and head of State at the end of January. It is a largely ceremonial post but of growing influence. The President calls elections, summons prime ministers to form governments, and is head of the judiciary. He is the ultimate Fourth Official of Italian public life – duties that President Sergio Mattarella and his predecessor Giorgio Napolitano have discharged with adroitness – sometimes decisively so. They have both saved the political day and averted chaos by personal intervention.

It is suggested that Draghi be chosen next year. He has said he doesn’t want it. So might Mattarella, the present incumbent, be persuaded to stay on until the present government ends in Spring 2023, when Draghi steps down as PM? Neither man is biting at the idea.

Besides, making Draghi President of Italy might be a tremendous waste of his talents when they are needed most. The extraordinary gifts of intellect, drive and intuition are likely to be needed more urgently over the next few years by Italy, Europe and the eco-economy of the planet.

Reluctant memo to Mario Draghi, President of the Council of Ministers of the Italian Republic: forget about Cincinnatus and his plough.