The Economist - USA (2021-02-20)

The Economist February 20th 2021 Europe 43

jects could be completed by 2026, when the
last of the funds will be disbursed, but add-
ed that they should fit into a strategy aim-
ing at 2050, when the eu’s net carbon
emissions are meant to reach zero.
Although 15 of the 24 places at Mr
Draghi’s cabinet table will go to politicians
from the various parties in his coalition,
the ministries that will execute Italy’s re-
covery plan will mainly be led by techno-
crats. Three stand out. Roberto Cingolani, a
physicist with a background in robotics
and nanotech, will run a super-ministry
devoted to ecological transition. Vittorio
Colao, a former Vodafone boss, will over-
see digital and technological matters. Da-
niele Franco, the new finance minister,
comes from Italy’s central bank. All three
have managerial as well as technical exper-
tise. Such appointments, says Mr Valli,
show that “Mr Draghi wants his people in
charge” of the recovery fund. At the ecbhe
was often keener on executing good policy
than in winning over critics.
In his Senate address Mr Draghi also
promised to speed up vaccination, and to
begin a comprehensive overhaul of the in-
come-tax system. He pledged to promote
female employment and to narrow one of
Europe’s widest pay gaps between men and
women. Other areas for reform were the ju-
dicial system and public administration.
Much of this will please officials in Brus-
sels, who saw in Mr Conte’s draft plan more
ambition on spending proposals than the
reform that Italy’s huge debt stock (see
chart) makes imperative. Paolo Gentiloni,
the European commissioner charged with
overseeing the recovery plans, is himself a
former Italian prime minister who under-
stands the country’s roadblocks to reform.
After decades in public service (plus a
stint at Goldman Sachs), Mr Draghi’s new
job marks the 73-year-old’s first foray into
democratic politics. But the “technocrat”
label conceals as much as it describes. He
displayed sharp political instincts during
the euro crisis, preparing the ground for
policy shifts like the start of quantitative
easing, and he outflanked critics like Jens
Weidmann, the hawkish head of the Bun-
desbank. German conservatives detested
his dovishness but failed to halt his poli-
cies. On leaving office in 2019 Mr Draghi
was showered with praise by Chancellor
Angela Merkel, and was awarded Germa-
ny’s Order of Merit, its highest civilian
honour. Most of Europe’s leaders, whom he
will meet (virtually) at a summit on Febru-
ary 25th, know and respect him. “The gut
feeling is that someone like Draghi won’t
blow it,” says a German official.
All this should help him manage what
is likely to be a short-lived administration
(an election is due by June 2023.) Still, the
snake pit of Italian politics poses a new
sort of test. Apart from the League and Mr
Berlusconi’s Forza Italia, Mr Draghi’s cabi-

net unites representatives of the hetero-

geneous Five Star Movement and three

leftist parties. “Unity is not an option; uni-

ty is a duty,” the new prime minister

warned parliament this week. But a quarter

of the Five Star lawmakers failed to support

him in his first Senate confidence vote.

And squabbles have already erupted, over

picking junior ministers and closing ski

slopes. They will not be the last. 

The weight of money

Government debt, % of GDP

Selected EU countries, Q3 2020

Source: Eurostat

Poland

Germany

Austria

Croatia

Belgium

Spain

France

Portugal

Italy

Greece

200150100500

0.29

2.35

0.30

0.04

0.52

1.31

2.67

0.27

2.58

0.34

Gross debt, €trn

Catalonia votes

Variations on a

nationalist theme

C

atalans pridethemselves on their se-

ny, their hard-headed common sense.

Yet when it comes to politics, as Jaume Vi-

cens Vives, a great Catalan historian of the

mid-20th century, pointed out, they have

more often acted with its opposite: rauxa,

or emotional impulsiveness. In the run-up

to an election for the regional government

on February 14th, many expected that prac-

tical matters such as the pandemic and the

economic slump would be uppermost in

Catalan minds. But the wounds of October

2017, when an unconstitutional referen-

dum on independence for one’s of Spain’s

most important regions led to the jailing of

nine separatist leaders, are still raw. The

Catalan authorities let the prisoners out on

day release so that they could campaign.

Once again, the emotional divide over in-

dependence dominated the election.

The separatist parties won 74 seats, in-

creasing their slender majority in the 135-

strong Catalan parliament by four. For the

first time since launching their independ-

ence drive in 2012 they won a majority of

the popular vote, with a total of 51%. But

the import of that was blunted by a record

low turnout of under 54% (down from 79%

at the previous election, in 2017), de-

pressed by the pandemic and political dis-

affection. The nationalist vote, meanwhile,

was split among four parties with very dif-

ferent strategies. This allowed the Catalan

affiliate of the Socialist Party of Pedro Sán-

chez, Spain’s prime minister, to win more

votes than any other party, even though it

took only 23%. For him it was a useful, if

limited, victory.

Esquerra (the Republican Left of Catalo-

nia), which now favours gradually building

wider public support for independence,

won 21% of the vote and 33 seats. It is now

the best placed to preside over the General-

itat, the Catalan administration, dislodg-

ing its coalition partner, Junts (Together).

As the party of Carles Puigdemont, a for-

mer president of the Generalitat who fled

to Belgium in October 2017, Junts still flirts

with unilateral action of the kind it took in

2017, when it declared independence after

the referendum. The two parties have often

been at loggerheads with each other and

with the cup, an anti-capitalist separatist

group that increased its seats from four to

nine. Negotiations over forming a new

government may take weeks.

“It’s time to sit down and see how we

settle this with a referendum,” said Pere

Aragonès, an Esquerra leader who is likely

to be the next president. He also wants an

amnesty for the prisoners. Another refer-

endum on independence would aggravate

a conflict that splits Catalonia down the

middle. More modestly, Mr Sánchez’s gov-

ernment, which has sometimes depended

on Esquerra in the national parliament in

Madrid, is likely to approve pardons for the

separatist prisoners. It began desultory

talks with Esquerra that could eventually

lead to an agreement for even more region-

al autonomy, which might satisfy most

Catalans while irritating other Spaniards.

Mr Sánchez’s hand was strengthened by

poor results in Catalonia both for Ciudada-

nos, a centre-right party that lost 30 seats,

and the People’s Party, the main conserva-

tive opposition. Both were overhauled by

Vox, a hard-right party, which won 8% of

the vote.

The messy result of this week’s election

prolongs rather than resolves Catalonia’s

political drama. The region is “resigned

and downcast”, says Jordi Alberich, an

economist in Barcelona, the Catalonian

capital. “The separatists are resigned to the

fact that independence won’t happen, and

the non-nationalists that there’s nothing

to be done.” The relentless theatre of the in-

dependence drive has hurt the Catalan

economy, which was overtaken in size by

the Madrid region in 2017. “It’s very diffi-

cult to unwind this,” says Mr Alberich. “It

takes a long time and that has a heavy day-

to-day cost.” 

MADRID

Another separatist victory in Catalonia,

but a hollow one