Italy’s difficult power balance...
Having spent much of her career railing against bureaucrats and financial elites, Italy’s new right-wing Prime Minister Giorgia Meloni now has to get them on side — and it is not proving easy.
Things got off to a bad start after her victory at a September 25 election. Searching for a finance minister who would reassure markets and Italy’s European partners, three political sources said she was turned down by European Central Bank board member Fabio Panetta and the outgoing minister Daniele Franco, a former Bank of Italy official.
So instead of appointing a ‘technocrat’ - an unelected official with the technical expertise to implement policy - Meloni ended up picking career politician Giancarlo Giorgetti of the co-ruling League party.
Panetta and Franco were left to vie next year for the role of Bank of Italy governor, an appointment made jointly by the government, the central bank and the head of state.
An ECB spokesperson said Panetta declined to comment. Franco was not available to comment. Meloni’s office did not reply to several requests for comment.
Now the Treasury department’s influential director general Alessandro Rivera is in the crosshairs of Meloni’s inner-circle, three government officials said, declining to be named due to the sensitivity of the matter.
But there is a dearth of viable alternatives. Meloni, a fiery conviction politician, has often spoken out against Italy’s reliance on technocrats to solve its economic problems and lambasted alleged interference from “high international finance” and “Brussels bureaucrats”. Yet to manage Europe’s second-largest debt pile and ensure the arrival of billions of euros of European Union pandemic recovery funds, it is vital that she finds a constructive way of working with these powerful policymakers, both at home and abroad.
Most Italian civil servants remain in place regardless of election outcomes, but new governments can replace some heads of department soon after taking office. Experienced top officials like Rivera, who has been Treasury director general under three administrations, are usually reappointed.
Unknown to the general public but a point of reference for the financial community and European officials, Rivera is considered too independent by Meloni’s aides, who are unhappy with his handling of some of Italy’s main financial dossiers.
These include the privatisation of national airline ITA Airways — the successor to Alitalia — and efforts to relaunch the country’s fifth largest bank Monte dei Paschi di Siena (MPS), which is 64%-owned by the Treasury.
“Rivera has influential supporters, especially among bankers, but he also seems to have powerful enemies in Meloni’s Brothers of Italy party,” said Francesco Galietti, head of political risk consultancy Policy Sonar and a former Treasury official.
Rivera was not available to comment. A Treasury spokesperson said his future would be decided “at the right time.”during the election campaign Meloni called in vain for her predecessor Mario Draghi to freeze the sale of a majority stake in ITA.
Less than a month before the election, the Treasury picked a consortium for exclusive talks led by US private equity fund Certares, but the transaction has not been completed. Now German carrier Lufthansa has renewed an interest, which would reverse the path laid out by Rivera’s top team. —
INSTEAD OF APPOINTING A ‘TECHNOCRAT,’ ITALY’S NEW RIGHT-WING PRIME MINISTER GIORGIA MELONI ENDED UP PICKING CAREER POLITICIAN GIANCARLO GIORGETTI OF THE CO-RULING LEAGUE PARTY