ROME (Reuters) – Prime Minister Mario Draghi on Wednesday promised sweeping reforms to help rebuild Italy following the coronavirus pandemic, as he set out his priorities ahead of a mandatory confidence vote in his government.
Draghi, the former head of the European Central Bank, was sworn into office at the weekend at the helm of a cabinet that has the backing of parties from across the political spectrum, to guide Italy through the health crisis and an economic slump.
“Our main duty … is to fight the pandemic by all means and to safeguard the lives of our fellow citizens,” Draghi said in his maiden speech to parliament. “Today, unity is not an option, unity is a duty.”
Draghi said his government would look to the future with a series of reforms aimed at fostering long-term growth in the eurozone’s third largest economy, which is mired in its worst recession since World War Two.
His immediate priorities will be ensuring a smooth vaccination campaign against COVID-19 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 wants to overhaul the public administration, which is throttled by red tape, and the justice system, one of the slowest in Europe.
“Today we have, as did the governments of the immediate post-war period, the possibility, or rather the responsibility, to launch a new reconstruction,” 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.
Hailing Draghi’s appointment, investment bank Morgan Stanley (NYSE:MS) 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.”
He might also have to struggle to hold together his disparate coalition, which includes political foes with vastly different views on issues such as immigration and welfare.
With a vast parliamentary majority on paper, Draghi looks set to waltz through Wednesday’s confidence vote in the Senate and a similar vote in the lower house on Thursday, the final step needed for the government to exercise its full powers.
The confidence vote in the Senate is due to start at 11 pm (2200 GMT) on Wednesday.
Source: Economy - investing.com
