Why Brussels wants Mario Draghi to fix the EU’s competitiveness woes

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Good morning from Santiago de Compostela where EU finance ministers gather today for two days of talks.

Today, our Rome bureau chief explains why Mario Draghi is back out of retirement for a new adventure, and our Athens correspondent profiles the former Goldman Sachs man who is attempting to become the new head of Greece’s left.

New Game

Europe’s favourite superhero, Mario Draghi, is back in action. The mission: helping the sputtering EU economy sharpen its competitive edge, writes Amy Kazmin.

Context: The European economy is losing steam. Some have criticised European Commission president Ursula von den Leyen’s focus on the green transition, saying it comes at the expense of businesses. Businesses have called for a coherent industrial strategy to support the EU’s green goals.

Responding to such discontent, Von den Leyen this week named Draghi, former European Central Bank president and ex-Italian prime minister, as a special adviser to prepare a report on the future of European competitiveness.

When it comes to rescue missions, Draghi certainly has credibility. 

As ECB president, Draghi is considered to have saved the euro, promising to do “whatever it takes” to defend the currency in the face of speculators during the darkest days of the eurozone debt crisis. It worked.

In 2021, he was pulled from retirement and parachuted into the Italian prime minister’s office to steer his country through the deep crisis unleashed by the Covid pandemic. He fixed Italy’s faltering vaccination drive, and agreed details of a potentially transformative €191.5bn reform and investment program with Brussels.

But since he was forced to leave that post after his coalition disintegrated last October, Draghi has all but retreated from public view, declining public engagements and most interview requests.

Keeping a deliberately low profile, he made no public comments about his successor Giorgia Meloni or Italy’s many challenges. In his sole interview since resigning, he spoke about being a grandfather, and said he had no interest in any official or political positions in Italy or abroad.

But this month, Draghi stuck his head above the parapet with an essay in The Economist, arguing for deeper fiscal integration within the eurozone to cope with common challenges like climate change.

Von der Leyen’s announcement of Draghi’s new role a week later triggered euphoria in Europe and Italy, where the local press hailed the return of “Super Mario”. 

Meloni expressed satisfaction too, calling Draghi “one of the most influential Italians” and expressing hope that he would keep an eye out for his country in Brussels.

Chart du jour: Peak rates

The European Central Bank yesterday raised its interest rates to an all-time high to fight stubbornly high inflation. The increase by 25 basis points to 4 per cent weighed on the euro, which dropped to a three-month low.

Goldman Marx

A rather uninteresting race for a new leader of Greece’s leftwing opposition party Syriza has been spiced up by a former Goldman Sachs analyst, writes Eleni Varvitsioti.

Context: Former Syriza chief Alexis Tsipras suffered a crushing defeat by centre-right New Democracy last June. Tsipras stepped down after losing by a margin of more than 22 per cent.

Initially, three former Syriza ministers were poised to run for Sunday’s vote, which was delayed by a week owing to the catastrophic floods in central Greece.

But then 36-year-old Stefanos Kasselakis decided to run and convince Syriza’s members that he was the man for the job — despite his past at one of the world’s top investment banks.

Kasselakis said in an Instagram clip that he saw first-hand how capital was “buying cheaply other people’s labour” and how “arrogance makes money”. That’s why he decided this type of career was not for him, he said in the video that launched his campaign.

After his stint at the investment bank, he made a considerable fortune in the US by getting into shipping, he added. He also said that he was gay and married to a nurse.

That kind of openness is not for everyone. His enemies in the party see him as an exotic bird, claiming that he is not truly leftwing or even a real member of the party, with no governing experience. They also say his business activities sound murky.

But Kasselakis, who studied at Wharton, the University of Pennsylvania’s business school, paints himself as a perfect rival to sitting prime minister Kyriakos Mitsotakis, an alumnus of Stanford and Harvard.

Though the race is tight, he could pull it off. Former labour minister Efi Achtsioglou is leading some polls, but others see Kasselakis ahead.

What to watch today

1. EU economy and finance ministers meet in Santiago de Compostela, Spain.

2. Nato defence chiefs meet for an annual conference in Oslo.

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