One thing European leaders always knew about Italian Prime Minister Mario Draghi was he would never lose his cool.
When European Commission President Jean-Claude Juncker gathered senior policymakers on the 13th floor of the Berlaymont building in Brussels to thrash out details of the third Greek bailout in 2015, some were expecting trouble from then-Greek finance minister Yanis Varoufakis.
However, as Juncker worked line-by-line through proposed tax changes with a small group including then-Greek prime minister Alexis Tsipras, Varoufakis was engrossed in debate with Draghi at the other end of the room, according to two people who were present. At 3am, the anti-capitalist firebrand and the head of the European Central Bank (ECB) were debating GDP deflators and macroeconomic policy dilemmas from the 1930s like a pair of academics.
Three days later, Draghi shut off emergency liquidity to Greece and Tsipras eventually signed up to a version of the deal agreed that night.
This episode serves as a reminder of the qualities the 73-year-old veteran brings to the table. He is calm, ruthless and completely on top of the brief.
Draghi is not your typical central banker, according to a senior EU official who dealt with him first hand during his eight years at the helm of the ECB, and he is no ordinary technocrat. He is highly political and understands how to wield power, the official said. His return to the leaders’ council marks the arrival of a heavyweight who is respected across the EU’s political and geographical divides.
“Draghi’s authority, his confidence with European and world leaders, and his granular knowledge of procedures and institutions will definitely be consequential,” says Filippo Sensi, an Italian lawmaker who worked as a spokesman for two of Draghi’s predecessors.
During his time at the ECB, Draghi was one of the few outsiders who would prompt leaders to look up from their phones and listen when he entered the room, remembers one former prime minister. The central bank chief’s presentation would often open the summit discussion and, as the first to speak, he would shape the debate that followed, a senior official said.
He could spur leaders to action by describing even the gravest scenarios in a concise, sharp and factual way, one senior official said, while several other diplomats recalled that he remained cold-blooded and composed in the tensest moments.
His premiership comes with German Chancellor Angela Merkel preparing to step aside, French President Emmanuel Macron facing a difficult election next year and the EU as a whole shaken by the trauma of the COVID-19 pandemic.
Senior officials have high hopes for Draghi and believe he is uniquely positioned to drive change at home and in Brussels, but one summit veteran said he was worried that expectations fail to take account of how the complex domestic situation could undermine his position and power, and warned there is a risk of disappointment.
The task of fixing Italy has proved too much for a succession of prime ministers over the past two decades and Draghi has two years at most before another election is due.
“For Italy and for the system as a whole, this is a moment that is very delicate for the EU’s future,” Sensi said.
Draghi takes office with a wide parliamentary mandate and high polling numbers. Recent figures show about 65 percent of voters are optimistic about his prospects.
However, Italy’s economy had stagnated for years before the pandemic claimed more than 95,000 lives and left public debt approaching 160 percent of GDP. Draghi’s challenge is to use the might of the EU’s 750 billion euro (US$910 billion) recovery package to boost long term growth by cutting red tape, helping young people to find good jobs and fixing the logjam in the courts which scares off potential investors.
Like the EU’s other 26 leaders, Draghi’s immediate priority will be the recovery from the pandemic and getting people vaccinated quickly. Beyond that, he has a chance to complete a strategic plan — and legacy — that he himself mapped out during his time with the ECB in Frankfurt and since.
Draghi used to tell leaders that recovery from the financial crisis would involve three legs, a senior official said. The ECB needed to buy time, which it did by buying up government debt. Next the bloc and its institutions had to build fiscal capacity — and the recovery fund is a key step on that path.
Finally, member states have to use that time and those tools to take serious measures to upgrade their economies. In Italy, the most important economy in that process, Draghi now gets to take charge of the overhaul himself.
The prospect of future European integration may hinge on whether he succeeds.
France’s Macron and German Finance Minister Olaf Scholz, an outsider to succeed Merkel as chancellor this year, have both insisted that the recovery fund should be a step toward deeper fiscal integration.
However, establishing more permanent fundraising capabilities will effectively depend on the success, or failure, of how Italy spends the 209 billion euros it will receive through the pandemic recovery funds, according to two diplomats from different ends of the continent.
In the eyes of the so-called frugal member states, such as the Netherlands, Draghi has the credibility to make the case for deeper integration, one of the diplomats said. Dutch Prime Minister Mark Rutte and his allies will know that he backs his arguments with facts and not populistic narratives.
If it works, in a few years’ time he may be able to cash in on that trust and push for a more permanent tool, the diplomat went on to suggest. However, if he fails, the diplomat said, the consequences will be felt well beyond Italy’s borders.
Trying to force a partnership between Taiwan Semiconductor Manufacturing Co (TSMC) and Intel Corp would be a wildly complex ordeal. Already, the reported request from the Trump administration for TSMC to take a controlling stake in Intel’s US factories is facing valid questions about feasibility from all sides. Washington would likely not support a foreign company operating Intel’s domestic factories, Reuters reported — just look at how that is going over in the steel sector. Meanwhile, many in Taiwan are concerned about the company being forced to transfer its bleeding-edge tech capabilities and give up its strategic advantage. This is especially
US President Donald Trump’s second administration has gotten off to a fast start with a blizzard of initiatives focused on domestic commitments made during his campaign. His tariff-based approach to re-ordering global trade in a manner more favorable to the United States appears to be in its infancy, but the significant scale and scope are undeniable. That said, while China looms largest on the list of national security challenges, to date we have heard little from the administration, bar the 10 percent tariffs directed at China, on specific priorities vis-a-vis China. The Congressional hearings for President Trump’s cabinet have, so far,
The US Department of State has removed the phrase “we do not support Taiwan independence” in its updated Taiwan-US relations fact sheet, which instead iterates that “we expect cross-strait differences to be resolved by peaceful means, free from coercion, in a manner acceptable to the people on both sides of the Strait.” This shows a tougher stance rejecting China’s false claims of sovereignty over Taiwan. Since switching formal diplomatic recognition from the Republic of China to the People’s Republic of China in 1979, the US government has continually indicated that it “does not support Taiwan independence.” The phrase was removed in 2022
US President Donald Trump, US Secretary of State Marco Rubio and US Secretary of Defense Pete Hegseth have each given their thoughts on Russia’s war with Ukraine. There are a few proponents of US skepticism in Taiwan taking advantage of developments to write articles claiming that the US would arbitrarily abandon Ukraine. The reality is that when one understands Trump’s negotiating habits, one sees that he brings up all variables of a situation prior to discussion, using broad negotiations to take charge. As for his ultimate goals and the aces up his sleeve, he wants to keep things vague for
RSS