Mario Draghi, the former president of the European Central Bank (ECB), has accepted a request from Italian President Sergio Mattarella to form a cabinet. The new administration will tackle two urgent challenges: a pandemic of the new coronavirus and a deep recession.
Draghi, who played an important role in saving Europe from the sovereign debt crisis, visited Cheong Wa Dae on the 3rd and accepted the request. “Overcoming the pandemic, completing vaccinations, providing solutions to the daily problems of our citizens, and revitalizing Italy are the challenges we face,” Draghi said after announcing the acceptance.
Draghi (73) wants to meet with the leaders of each party and establish a coalition government with the largest possible majority in parliament. Prime Minister Conte sought to establish a third cabinet, but could not reach an agreement between the parties, and President Mattarella entrusted Mr. Draghi with the cabinet. The president warned that he could not afford a general election ahead of schedule in the current crisis.
Italy’s next prime minister, former ECB president Draghi-Mr. Conté failed to work together
Mr. Draghi arrived at Cheong Wa Dae
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Draghi said Italy “has a prominent resource” behind the European Union (EU) and is confident that talks with party leaders will create a momentum for unity.
Italy 10-year bond yield fell 8 basis points (bp, 1bp = 0.01%) to 0.57%. At one point, it dropped to 0.54%. Spreads with German bonds temporarily narrowed to 102bp, the lowest level in five years.
Italian government bonds rise, bond savior Draghi emerges as candidate for next prime minister
Draghi can be expected to be supported by the center-left Democratic Party and pro-European centrists, who were the second powers in the Conté administration. Forza Italia, a center-right wing led by former Prime Minister Berlusconi, may also support Draghi. The “Five Star Movement,” the largest force in parliament, is negative to Draghi’s support, but it is possible that some parties will disagree and support him.
If Draghi’s nomination is approved, the main issues will be measures against the new corona including vaccination and economic stimulus. How to use the funds obtained from the European Union (EU) Reconstruction Fund, which triggered the collapse of the Conté administration, is also an issue.
Draghi, an economist, is famous for his 2012 “do anything” statement. As ECB Governor, he launched Quantitative Easing (QE) in the euro area, which evolved into a pandemic emergency purchase program (PEPP) to combat the new corona. He retired as president in 19 years.
Original title:Ex-ECB Chief Draghi Accepts Mandate to Form Italy Government (3)、Ex-ECB Chief Draghi Accepts Mandate to Form Italy Government (2)、Ex-ECB Chief Draghi Accepts Mandate to Form New Italy Government(Excerpt)
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