I have followed with great interest the FT’s coverage of prime minister Draghi’s resignation and the implications this may have for the Italian government and economy (“Mario Draghi resigns after Italian coalition unravels”, FT.com, July 21).
Under Draghi’s leadership, the Italian economy has taken significant strides forward. The political stability of the national unity government has helped the country grip reform and present a plan for economic recovery.
The National Recovery and Resilience Plan (NRRP) has provided a comprehensive package of reforms and investments, and the first tranche of funding from NextGenerationEU (NGEU) is already being put to work investing in strategic sectors, social inclusion initiatives and job creation. Although the plan is still in the early days of implementation, it has already made an important contribution to Italy’s recovery, with 6.6 per cent GDP growth last year. UniCredit remains committed to the NRRP, to supporting households and companies, to contributing to a stable and functioning economy and to ensuring Italy’s long-term financial strength.
Growth is at the heart of Italy’s debt reduction strategy. While underpinning that growth with temporary stimulus may increase the budget deficit in the short term, it has been done within the confines of prudent fiscal policy, enabling vital investments to ensure the implementation of structural reforms.
However, the success of this strategy depends largely on the government’s ability to effectively deploy NGEU funds. To continue to draw down these funds, we must meet the timetable and milestones for reform set out in the NRRP.
While there will inevitably be political uncertainty as a result of Draghi’s exit, any slowdown in efforts to implement the NRRP would be to the detriment of the Italian people, and to the European economy.
This may be a political crisis, but we must not allow it to become an economic crisis. We cannot allow current instability and further political fragmentation to derail the important plans that are in place or unwind the good work done so far. A new administration must press forward, not row back, and I call on all political leaders to focus on what is in the national interest.
Pietro Carlo Padoan
Chairman, UniCredit Group and Former Italian Minister for Economy and Finance
Milan, Italy
