◼ POLITICS Bloomberg Businessweek September 16, 201932the past years. But it’s only rarely—and in any
case obliquely—that he ventures into suggesting a
specific course of action. The outsize impression
many Italians have of Draghi’s influence is partly
the consequence of his broader success and partly
the effect of the detached pragmatism he’s culti-
vated. Faced with bureaucratic complexity and eco-
nomic insecurity, the Italian public is simply more
and more convinced that a select handful of men
pull strings from behind the scenes.
Central banks—with their hallowed indepen-
dence, difficult-to-understand but far-reaching
powers, and penchant for hard-to-decipher acro-
nyms—are a perfect target for conspiracy theories.
Draghi himself has repeatedly said that monetary
policy cannot be the only game in town and has
called on governments and politicians to do their
part and not to expect central banks to save the day.
After changing the direction of Europe’s debt cri-
sis in 2012 with three simple words, “whatever it
takes,” his almost mythical status among the world’s
financial elite has increased expectations about his
future role in Italy. Draghi, however, will be return-
ing to an Italy profoundly different from the one he
left in 2011. Elections in March 2018 utterly changed
the country’s political landscape with an unwieldy
coalition of the center-right League and the popu-
list Five Star movement, putting it in the center of
the nativist and anti-EU wave washing over Europe.
On the table were pledges to reverse some of the
financial reforms of previous years and to ignore
Europe’s spending limits, even if it led to increasing
the national debt. And, of course, the country
flirted with the idea of leaving the single currency.
Financial markets started asking for a much higher
premium to buy the country’s bonds, bringing
yields close to crisis levels for a few months.
From his office in Frankfurt, Draghi did little
but warn of the potential effect on investor senti-
ment and European partners of the proclamations
of some of the coalition’s members. “Complicated
questions have easy, wrong answers” is the quip
by German economist Rudi Dornbusch, one of
Draghi’s professors during his time at MIT in the
1970s—and it’s a good way to sum up the ECB pres-
ident’s attitude.
With the populists in the ascendance, Draghi
found himself more detached from Italy’s rulers
than he’d been for decades. Ironically, the situa-
tion simply increased the calls for his return to the
national stage when his ECB term runs out.
It’s not the first time. In 2015, when the ECB
embarked on quantitative easing, Draghi’s name
was frequently cited as a candidate for the coun-
try’s presidency by Italian media, so much so thatthe central banker had to go on the record to deny
his interest in the post. “I don’t want to be a pol-
itician,” he told Germany’s Handelsblatt newspa-
per. He’s repeated it in private to ministers and
top European officials. The presidency would go to
Sergio Mattarella, who still holds office and who was
Draghi’s only regular contact in the government.
Draghi will return from his tenure in Frankfurt
to—no surprise—a new government in Rome, fol-
lowing the collapse of the Five Star and League
coalition in August. Despite the change in the bal-
ance of power, there are few signs that the gen-
eral mood at home has changed significantly. The
League under Matteo Salvini has doubled down on
its strident anti-EU rhetoric and is still leading in
the polls. The current administration in Italy prom-
ises to be just as conflict-ridden and short-lived as
the one that preceded it. And a new recession for
the country may be just around the corner.
He’s personally faced populist anger and frustra-
tion in his native Italy before. When Draghi visits
family in Milan or Rome, his days are less structured
and the security cordoning him off from the world
is more relaxed. He likes going shopping, and the
people he meets often offer him an earful of their
views. It’s not always easy listening. In 2013 a young
man approached Draghi in the streets of Rome. He
explained that he was working odd jobs at night to
make ends meet and had one simple question: “Why
can’t you print money so that we all have enough
to live on?” Draghi’s answer required a long argu-
ment touching upon the risk of inflation, European
treaties, and the cautionary tales of economic
history—difficult points to make when the face of his
interlocutor bore the evidence of suffering.
Draghi is careful not to make any judgment, even
in private, when confronted with the “easy, wrong
answers” of politicians to difficult questions. After
all, he and his policies too have been deemed par-
tially culpable for the rise of populism. This doesn’t
mean, of course, that Draghi has any sympathy for
the populists’ conclusions. His argument can be
summed up thus: If what’s fueling populism is a
feeling of impotence in the face of migration, glo-
balization, technological change, and, more gener-
ally, the growing complexity of society, retrenching
behind national borders is not an effective way to
“take back control,” to use one of the most effective
catchphrases of the Brexit campaign.
In the populist and nationalist way of think-
ing, Draghi argued in early 2019 as he accepted an
honorary degree from the University of Bologna,
“if citizens want to be able to exert more control
over their destinies, they have to loosen the EU’s
political structures. But this belief is wrong. It is“Independence
does not
guarantee
sovereignty”◼ POLITICS Bloomberg Businessweek September 16, 201932
thepastyears.Butit’sonlyrarely—andinany
caseobliquely—thatheventuresintosuggestinga
specificcourseofaction.Theoutsizeimpression
manyItalianshaveofDraghi’sinfluenceis partly
theconsequenceofhisbroadersuccessandpartly
theeffectofthedetachedpragmatismhe’sculti-
vated.Facedwithbureaucraticcomplexityandeco-
nomicinsecurity,theItalianpublicis simplymore
andmoreconvincedthata selecthandfulofmen
pullstringsfrombehindthescenes.
Centralbanks—withtheirhallowedindepen-
dence,difficult-to-understandbutfar-reaching
powers,andpenchantforhard-to-decipheracro-
nyms—area perfecttargetforconspiracytheories.
Draghihimselfhasrepeatedlysaidthatmonetary
policycannotbetheonlygameintownandhas
calledongovernmentsandpoliticianstodotheir
partandnottoexpectcentralbankstosavetheday.
AfterchangingthedirectionofEurope’sdebtcri-
sisin 2012 withthreesimplewords,“whateverit
takes,”hisalmostmythicalstatusamongtheworld’s
financialelitehasincreasedexpectationsabouthis
futureroleinItaly.Draghi,however,willbereturn-
ingtoanItalyprofoundlydifferentfromtheonehe
leftin2011.ElectionsinMarch 2018 utterlychanged
thecountry’spoliticallandscapewithanunwieldy
coalitionofthecenter-rightLeagueandthepopu-
listFiveStarmovement,puttingit inthecenterof
thenativistandanti-EUwavewashingoverEurope.
Onthetablewerepledgestoreversesomeofthe
financialreformsofpreviousyearsandtoignore
Europe’sspendinglimits,evenif it ledtoincreasing
the national debt. And, of course, the country
flirted with the idea of leaving the single currency.
Financial markets started asking for a much higher
premium to buy the country’s bonds, bringing
yields close to crisis levels for a few months.
From his office in Frankfurt, Draghi did little
but warn of the potential effect on investor senti-
ment and European partners of the proclamations
of some of the coalition’s members. “Complicated
questions have easy, wrong answers” is the quip
by German economist Rudi Dornbusch, one of
Draghi’s professors during his time at MIT in the
1970s—and it’s a good way to sum up the ECB pres-
ident’s attitude.
With the populists in the ascendance, Draghi
found himself more detached from Italy’s rulers
than he’d been for decades. Ironically, the situa-
tion simply increased the calls for his return to the
national stage when his ECB term runs out.
It’s not the first time. In 2015, when the ECB
embarked on quantitative easing, Draghi’s name
was frequently cited as a candidate for the coun-
try’s presidency by Italian media, so much so thatthe central banker had to go on the record to deny
his interest in the post. “I don’t want to be a pol-
itician,” he told Germany’s Handelsblatt newspa-
per. He’s repeated it in private to ministers and
top European officials. The presidency would go to
Sergio Mattarella, who still holds office and who was
Draghi’s only regular contact in the government.
Draghi will return from his tenure in Frankfurt
to—no surprise—a new government in Rome, fol-
lowing the collapse of the Five Star and League
coalition in August. Despite the change in the bal-
ance of power, there are few signs that the gen-
eral mood at home has changed significantly. The
League under Matteo Salvini has doubled down on
its strident anti-EU rhetoric and is still leading in
the polls. The current administration in Italy prom-
ises to be just as conflict-ridden and short-lived as
the one that preceded it. And a new recession for
the country may be just around the corner.
He’s personally faced populist anger and frustra-
tion in his native Italy before. When Draghi visits
family in Milan or Rome, his days are less structured
and the security cordoning him off from the world
is more relaxed. He likes going shopping, and the
people he meets often offer him an earful of their
views. It’s not always easy listening. In 2013 a young
man approached Draghi in the streets of Rome. He
explained that he was working odd jobs at night to
make ends meet and had one simple question: “Why
can’t you print money so that we all have enough
to live on?” Draghi’s answer required a long argu-
menttouchingupontheriskofinflation,European
treaties,andthecautionary talesofeconomic
history—difficult points to make when the face of his
interlocutor bore the evidence of suffering.
Draghi is careful not to make any judgment, even
in private, when confronted with the “easy, wrong
answers” of politicians to difficult questions. After
all, he and his policies too have been deemed par-
tially culpable for the rise of populism. This doesn’t
mean, of course, that Draghi has any sympathy for
the populists’ conclusions. His argument can be
summed up thus: If what’s fueling populism is a
feeling of impotence in the face of migration, glo-
balization, technological change, and, more gener-
ally, the growing complexity of society, retrenching
behind national borders is not an effective way to
“take back control,” to use one of the most effective
catchphrases of the Brexit campaign.
In the populist and nationalist way of think-
ing, Draghi argued in early 2019 as he accepted an
honorary degree from the University of Bologna,
“if citizens want to be able to exert more control
over their destinies, they have to loosen the EU’s
political structures. But this belief is wrong. It is“Independence
does not
guarantee
sovereignty”