“Even central bankers have a heart” Mario Draghi recalled with a witty quip in Parliament in the debate of recent days which incredibly resulted in the most hallucinating of government crises. But what are the feelings that are likely to run through the former prime minister in these hours? FIRSTonline asked those who know Mario Draghi well how Salvatore Rossi, now Chairman of Tim but previously General Manager of the Bank of Italy where he worked closely with the premier before he rose to the presidency of the ECB. According to Rossi, “Pride and regret” are the feelings that run through Mario Draghi. But, beyond his personal aspects, his fall risks causing "negative macroeconomic effects almost like those of a worsening of the war" between Russia and Ukraine and very serious reputational damage for Italy. Liquidating the most authoritative Italian in the world from the leadership of the government for short-sighted electoral reasons is the latest madness that a Parliament that started badly and ended up worse could do. Let us therefore hear how Salvatore Rossi evaluates political facts and their effects, who speaks with his usual sobriety but with great firmness.
President, frankly did you expect the Senate to send the Draghi government into crisis?
“No, I didn't expect that. I feared it, but I hoped that the general interest of the Italians, the appeals and declarations for the continuation of the government experience would be taken into account. But that didn't happen."
You know Mario Draghi very well having worked together in the Bank of Italy: at this moment will he be proud of having served Italy well, even with his government, or will he regret not having been able to complete the work?
“I think both feelings are present in Mario Draghi's soul right now. Certainly he is very proud of what has been done in recent months. Indeed, he clearly said in his speech to the Senate that never before has he felt proud of being Italian, also because his government has interpreted the country's ability to react to adversity. At the same time there is certainly the regret of not having been able to carry this experience to the end. Not through his responsibility, of course, but still this experience was interrupted ”.
What are the most relevant economic effects of the Draghi government crisis?
“The first effect there will be on PNRR, a pillar of Italian economic policy at the moment. It is clear that the commitment to carry forward the plan agreed with the European Commission to obtain the funds of the Next Generation EU will at least be suspended.
“The new government could take it back, but in the meantime time is wasted and time is precious at this stage. Because, let us remember, the plan envisages not only investments and spending capacity, but also reforms. That of justice, that of competition, that of public procurement, that of the taxman. Reforms that Europe has asked for as a condition for disbursing the funds. They have largely been done, but the work has not been finished. There are no delegated decrees for that of the justice and for public procurement. While the other two reforms, competition and tax they still have to complete the parliamentary process before reaching the stage of delegated decrees.
“I remember that i implementing decrees they are essential for a law approved by Parliament to be truly effective. Without them, laws remain a dead letter. It is understood that if the first two risk suffering a stalemate, the other two are even further behind. And so the consequences on the PNRR are obvious: the most serious is that the second installment of the plan, approx 20 billion, may not arrive on schedule. The first, approx 46 billion, it had been delivered to us in recent months precisely because all the objectives foreseen had been achieved in the established time.
“And since, as I mentioned, the PNRR is the nucleus around which the entire Italian economic life revolves, the effects on the economic cycle could be negative. I remember that Bank of Italy she came out in mid-July with hers Forecasts drawing two scenarios: one more positive, based on the lines already drawn; and a decidedly more negative one related to worsening of the war of Russia's aggression against Ukraine. The government crisis could lead to negative macroeconomic effects almost like those of a worsening of the war. The government to come will have to make up for all the lost time”.
President, are the damages of the crisis more significant on an internal level or those, also in terms of reputation, on an international level?
“The damages on the internal level are concrete and immediately perceptible by the citizens because they are reflected on the economic situation, therefore on the Salaries, on prices. But they also risk being there reputational damage international, because the Draghi government had made Italy recover weight in the concert of nations, first of all thanks to the personal credit enjoyed by the premier, who is, let us remember, the best known and most esteemed Italian in the world; but also thanks to the sharpness of the Government's positions in foreign policy, above all on Russia's war of aggression against Ukraine. Cleanliness, I like to remind you, always pays off on uncertainty and fuzziness”.
With the government crisis, will the Single Network project of the TLCs stop?
“I hope not. Indeed, I trust that it will not stop, because the protagonists of this affair, who see the active and present Cassa Depositi e Prestiti for the public part, have repeatedly expressed their strong determination to move forward. However, it is true that there is a public interest in this story of the Single Network and the government cannot and must not be ignored. The public interest goes hand in hand with the private interest of the shareholders of the various companies involved.
“In the design of the Single network there is the idea of ensuring a quick and effective connection to all Italian citizens, regardless of where they are located, in large cities as in small towns or in the countryside. There is a large body of thinking that this interest is best served by a single Network and not multiple competing infrastructure networks. Things don't go de plano, of course. Because it will be necessary to see if the Antitrust authorities, the European and the Italian ones, will agree with this approach.
“However, there is a strong argument in favor of the single network also from the point of view of competition, because the concept of competition, and here I speak as an economist, it is a dynamic and not a static concept, in other words future consumers must also be protected, not just the present ones. Since we are talking about infrastructures that require huge long-term investments, we also talk about the need to involve private companies in maintaining and expanding the network, which in return will have to obtain a fair advantage. Otherwise investments are compressed and the interests of future consumers are sacrificed. And when I talk about the future, I mean five years, not a hundred."
