ROME (Reuters) – Prime Minister Mario Draghi called on Italians on Wednesday to pull together to help rebuild the country following the coronavirus pandemic and promised his new government would introduce sweeping reforms to revitalise the battered economy.
In his maiden speech to parliament, the former head of the European Central Bank said his broad-based administration would throw all its efforts into defeating COVID-19, while looking to leave a stronger, greener nation for future generations.
“Today we have, as did the governments of the immediate post-war period, the possibility, or rather the responsibility, to launch a new reconstruction,” Draghi told the Senate, ahead of a mandatory confidence vote that he won by a huge margin.
His immediate priorities will be ensuring a smooth coronavirus vaccination campaign and re-writing plans for how to spend more than 200 billion euros ($240 billion) of European Union funds aimed at rebuilding the economy.
To guarantee the money is well spent, Draghi signalled that he wanted to overhaul the public administration, which is throttled by red tape, and the justice system, one of the slowest in Europe.
Draghi also put a strongly pro-European stamp on his administration, which includes parties such as the right-wing League which have been highly critical of the euro common currency and Brussels bureaucracy in the past.
“Supporting this government means sharing the irreversibility of the choice of the euro, it means sharing the prospect of an increasingly integrated European Union that will arrive at a common public budget,” said Draghi, who received a standing ovation from senators after his 50-minute address.
DAUNTING CHALLENGES
If he succeeds in his mission, Draghi will not only help revive Italy after the worst recession since World War Two, but will also give a boost to the whole EU, which has long fretted over Italy’s chronic sluggishness.
Draghi is among Europe’s most respected figures after his eight-year stewardship of the ECB, and his nomination as prime minister has been hailed by investors – as reflected in Italian bond sales on Tuesday that drew record demand.
Investment bank Morgan Stanley on Wednesday predicted a major improvement in Italy’s closely-watched bond spreads – the premium investors demand to hold Italian government bonds rather than German debt – and a double-digit outperformance by its stock market.
However, Draghi faces daunting challenges, with many sectors of the economy stalled and some companies only surviving thanks to state handouts. Draghi said he could not protect every job or business, adding: “Some will have to change, even radically.”
His cabinet will have to move fast. It can only govern for a maximum two years, with national elections due in early 2023.
Draghi said he would call on the army to help speed up the anti-coronavirus vaccination campaign, but warned the disease would force lasting changes in a country which has registered some 94,000 deaths — the second highest toll in Europe.
“The main duty to which we are called, all of us… is to fight the pandemic by all means and to safeguard the lives of our fellow citizens,” he said.
Draghi won Wednesday’s confidence vote in the 315-seat Senate by 262 to 40 and he is certain to secure a similar sized victory in the lower house on Thursday after all but one party — the far-right Brothers of Italy — rallied to his side.
As expected around 15 members of his largest parliamentary partner, the 5-Star Movement, defied their leadership and voted against Draghi, objecting to a technocrat taking charge and refusing to back a coalition that included old political foes.
(Additional reporting by Angelo Amante, Giulia Segreti and Giuseppe Fonte, Editing by Gareth Jones)
