Mario Draghi
Mario Draghi is an Italian politician, economist, academic, banker, statesman, and civil servant, who served as the prime minister of Italy from 13 February 2021 to 22 October 2022. Prior to his appointment as prime minister, he served as the president of the European Central Bank between 2011 and 2019. Draghi was also the chair of the Financial Stability Board between 2009 and 2011, and governor of the Bank of Italy between 2006 and 2011.
After working as an economist, Draghi worked for the World Bank in Washington, D.C., throughout the 1980s, and in 1991 returned to Rome to become director general of the Italian Treasury. He left that role after a decade to join Goldman Sachs, where he remained until his appointment as governor of the Bank of Italy in 2006. His tenure as Governor coincided with the 2008 Great Recession, and in the midst of this he was selected to become the first chair of the Financial Stability Board, the global standard-setter that replaced the Financial Stability Forum.
He left those roles after his nomination by the European Council in 2011 to serve as president of the ECB. He presided over the institution during the Eurozone crisis, becoming famous throughout Europe for saying that he would be prepared to do "whatever it takes" to prevent the euro from failing. In 2014, Draghi was listed by Forbes as the eighth-most powerful person in the world. In 2015, Fortune magazine ranked him as the world's "second greatest leader". He is also the only Italian to be listed three times in the Time 100 annual listicle. In 2019, Paul Krugman described him as "the greatest central banker of modern times." Moreover, thanks to his monetary policies, he is widely considered the "saviour of the euro" during the Euro area crisis. He has been nicknamed Super Mario by some media, a nickname that was popularised during his time as president of the ECB, when he was credited by numerous sources as having played a key role in combatting the Eurozone crisis.
After Draghi's term as ECB President ended in 2019, he initially returned to private life. On 3 February 2021, in the midst of the COVID-19 pandemic in Italy, Draghi was invited by President Sergio Mattarella to form a government of national unity, following the resignation of Giuseppe Conte. After successful negotiations with parties including the League, the Five Star Movement, the Democratic Party, and Forza Italia , Draghi was sworn in as prime minister on 11 February, pledging to oversee effective implementation of COVID-19 economic stimulus. Draghi was rated highly in public opinion polls in Italy during his time as prime minister; at the end of his first year in office Politico Europe ranked him as the most powerful person in Europe and The Economist named Italy as "Country of the Year", singling out Draghi's leadership as central to its nomination.
On 14 July 2022, the M5S revoked support to Draghi's coalition government regarding a decree concerning economic stimulus to offset the energy crisis. On the same day, despite having won a confidence vote, Draghi announced his resignation as prime minister, which was rejected by President Mattarella. On 21 July, Draghi resigned for a second time following the failure of a confidence vote to pass with an absolute majority due to the withdrawals of M5S, Lega, and FI. On the same day, President Mattarella accepted the resignation and Draghi remained in office as caretaker prime minister. He was succeeded by Giorgia Meloni on 22 October 2022.
Early life and education
Mario Draghi was born in Rome in 1947 to an upper-class family; his father Carlo, who was born in Padua, Veneto, first joined the Bank of Italy in 1922, and later worked for the Institute for Industrial Reconstruction and for the Banca Nazionale del Lavoro; while his mother, Gilda Mancini, who was born in Monteverde, Campania, near Avellino, was a pharmacist. He is the eldest of three children including Andreina, an art historian, and Marcello, an entrepreneur. When he was 15 years old, his father died; at 19, his mother died.Draghi studied at the Massimiliano Massimo Institute, a Jesuit school in Rome, where he was a classmate of the future chairman of Ferrari, Luca Cordero di Montezemolo, the future prefect and civil servant Gianni De Gennaro and the future television presenter Giancarlo Magalli. In 1970, he graduated with honours in economics at the Sapienza University of Rome, under the supervision of Keynesian economist Federico Caffè; his graduation dissertation was titled "Economic integration and the variation of exchange rates". In his dissertation, Draghi was particularly critical of Luxembourg Prime Minister Pierre Werner's remarks that European monetary union was "premature". Draghi went on to earn a PhD in economics from the Massachusetts Institute of Technology in 1977. His dissertation was titled "Essays on economic theory and applications", completed under the supervision of Franco Modigliani and Robert Solow.
Professor and civil servant
From 1975 to 1981, Draghi was first professor of economic and financial policy at the University of Trento, then of macroeconomics at the University of Padua, and later of mathematical economics at the Ca' Foscari University of Venice. In 1981, he was appointed professor of economic and monetary policy at the University of Florence a position that he held until 1994. During this time, he also spent time as executive director of the World Bank in Washington, D.C. In 1983, Draghi was also appointed a counsellor to then-Minister of Treasury Giovanni Goria.In 1991, Minister of Treasury Guido Carli and Bank of Italy Governor Carlo Azeglio Ciampi appointed Draghi as director general of the Italian Treasury; Draghi held this senior position in the civil service until 2001. During his time at the Treasury, he chaired the committee that revised Italian corporate and financial legislation, and drafted the law that continues to govern Italian financial markets. Draghi was also among the main proponents of the privatisations of many state-owned companies which occurred in the Italian economy through the 1990s. He also chaired the management committee of SACE, implementing a complete reformation of the group and managing the transition from the Mani Pulite corruption scandal. Draghi returned to chair SACE between 1998 and 2001, before the subsequent privatisation. During these years, he was also a board member of several Italian banks and corporations, like Eni, Institute for Industrial Reconstruction, Banca Nazionale del Lavoro and Istituto Mobiliare Italiano.
In 2001, he left the Treasury to become a fellow of the Institute of Politics at the John F. Kennedy School of Government at Harvard University. Draghi was also appointed as vice chairman and managing director of Goldman Sachs International in 2002. He was also made a member of the firm's management committee, holding all of these roles until 2005. He led Goldman Sachs's European strategy and its engagements with major European corporations and governments. After the revelation that off-market swaps had been systematically used by the Greek Government, facilitated by Goldman Sachs, Draghi stated that he "knew nothing" about the arrangement, and "had nothing to do with it". During this period, Draghi also worked as a trustee at the Institute for Advanced Study in Princeton, New Jersey, and also spent time as an honorary trustee at the Brookings Institution in Washington, D.C.
Governor of the Bank of Italy (2006–2011)
In December 2005, it was announced that Draghi would become governor of the Bank of Italy. He officially took up the position on 16 January 2006. In April 2006, he was elected by fellow central bank governors to become chairman of the Financial Stability Forum; this body would later be re-organised to become the Financial Stability Board in April 2009 on behalf of the G20, bringing together representatives of governments, central banks and national supervisors institutions in the wake of the financial crisis. As the inaugural FSB chairman, Draghi was responsible to the G20 leaders, and worked to promote international financial stability during the Euro area crisis, improve the functioning of markets and reduce systemic risk through information exchange and international cooperation between supervisors.In his capacity as Bank of Italy governor, Draghi was also a member of the governing and general councils of the European Central Bank and a member of the board of directors of the Bank for International Settlements. He also represented Italy on the board of governors at both the International Bank for Reconstruction and Development and the Asian Development Bank. On 5 August 2011, he made a contribution to domestic political debate when, together with the ECB President Jean Claude Trichet, he published a notable letter to the Italian Government of Silvio Berlusconi to recommend a series of economic measures that should urgently be implemented in Italy.
President of the European Central Bank (2011–2019)
Draghi had for years been mentioned as a possible successor to Jean-Claude Trichet, whose term as president of the European Central Bank was due to end in October 2011. On 13 February 2011, Wolfgang Münchau, associate editor of the Financial Times, endorsed Draghi as the best candidate for the position. A few days later, The Economist wrote that "the next president of the world's second-most-important central bank should be Mario Draghi". Draghi subsequently won the support of Italian prime minister Silvio Berlusconi for the position, who expressed a desire to see an Italian take the pre-eminent economic policymaking role within the European Union. On 17 May 2011, the Council of the European Union recommended the nomination of Draghi as President of the ECB. Draghi's nomination was later approved by the European Parliament and the ECB itself, and on 24 June 2011 his appointment was signed-off by EU leaders. During the nomination process, some concerns were raised about Draghi's past employment at Goldman Sachs. As a member of the Group of Thirty, founded by the Rockefeller Foundation, he was accused in Der Spiegel, Tagesschau.de and Die Welt of having a conflict of interest as president of the ECB. Draghi moved to Frankfurt and formally took up the role of ECB President on 1 November 2011, the day after Trichet's term expired.In December 2011, Draghi brokered a €489 billion three-year loan program from the ECB to EU banks. Draghi's ECB also promptly repealed the final two interest rate hikes of Trichet's term, stating this would ease the Euro area crisis. In February 2012, Nobel Prize laureate in economics, Joseph Stiglitz argued that on the issue of the impending Greek government-debt crisis, the ECB's insistence that it should be "voluntary", as opposed to a default agreed by Greek authorities, would be "a gift" to the financial institutions that sold credit default insurance on that debt, a position Stiglitz argued was a moral hazard. In March 2012, a second, larger round of ECB loans to EU banks was initiated, this time called the Long-Term Refinancing Operation. One commentator, Matthew Lynn, saw the ECB's injection of funds, along with quantitative easing from the US Federal Reserve and the Bank of England, as feeding increases in oil prices in 2011 and 2012.
In July 2012, in the midst of renewed fears about sovereigns in the eurozone, Draghi stated in a panel discussion that, under his leadership, the ECB "is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." This statement was heavily reported throughout the EU and the world's financial markets, and initially led to a steady decline in bond yields for eurozone countries, in particular Spain, Italy and France. In light of what had been slow political progress on solving the eurozone crisis, Draghi's statement has come to be seen subsequently as the major turning point in the fortunes of the eurozone, with numerous policymakers and commentators describing it as having been essential to the continuation of the euro currency.
Draghi has since come to be prominently associated with the phrase "whatever it takes". Beginning in 2013, Draghi was criticised in the context of the scandals rising around the bank Banca Monte dei Paschi di Siena, which according to at least one German publication was making very risky deals.
In April 2013, Draghi said in response to a question regarding membership of the eurozone, "These questions are formulated by people who vastly underestimate what the euro means for the Europeans, for the euro area. They vastly underestimate the political capital that has been invested in the euro." In 2015, in an appearance before the European Parliament, Draghi said that the future of the eurozone was at risk unless member countries gave up some independence and created more Pan-European government institutions. "We have not yet reached the stage of a genuine monetary union," Draghi said. Failure of eurozone countries to harmonise their economies and create stronger institutions would, he said, "put at risk the long-term success of the monetary union when faced with an important shock." In 2015, Draghi said that his political ideas belong to liberal socialism.
On 31 October 2019, his mandate as ECB President expired and International Monetary Fund Managing Director Christine Lagarde was appointed as his successor.