June 15, 2021

Draghi ends the ‘revolving doors’ in large Italian public companies


ROME

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Politics is left out in the election of the senior managers of Italian state companies, quite the opposite of what the Prime Minister Pedro Sánchez does in Spain. Prime Minister Mario Draghi imposes his method, regardless of politics, to select the top executives of hundreds of Italian companies with state participation.

The ‘Draghi method’ is known, which is part of the identity of his personality. In short, Draghi’s work system is based on four principles: Identify the objective, surround yourself with the best collaborators, delegate and decide once the possible risks have been reduced to a minimum. Draghi, marking a radical discontinuity, has broken with a decades-long tradition that has conditioned Italian politics and its governments.

The first step, which has surprised many, has been to change the management teams of the very powerful and influential Cassa Depositi e Prestiti (CDP), an Italian investment bank founded in 1850 in Turin, which has become the most important of the country to promote investment, growth of the country and saving of Italians. He has done the same with the public railway company.

Draghi’s important decision is made with the clear objective of placing the best and most experienced executives in state-owned companies that are essential when it comes to receiving the European Recovery Fund. Italy, in total, will manage 248,000 million euros in investments and reforms.

Fight without quarter between parties

Until now, to elect the directors of more than 500 state companies, the political parties exerted all their influence to obtain the maximum number of positions. It was a fight without quarter, a relentless war between parties and government. For decades in Italian politics followed the so-called ‘Manual Cencelli’, a journalistic expression that has its origin in the surname of a former politician of the Christian Democracy, who revealed in an interview what this distribution of power and the tricks of the politicians was like. . The ‘Manual Cencelli’, an expression often used in an ironic and derogatory sense, has become very familiar in Italian politics for the assignment of political roles and positions in companies and government; that is, political parties distribute power based on their weight in parliament, regardless of merits.

The ‘Cencelli Manual’ and the system of power that Draghi’s predecessor, former Prime Minister Giuseppe Conte, had implemented during his two and a half years in office, has been demolished by the former president of the European Central Bank. What used to be long negotiations and political battles to choose a senior manager of an Italian public company or an important government position, Draghi has turned it into a simple communication to the fired, thanking him and the ‘benservito’ (dismissal letter), appointing as successor a professional that the prime minister considers the most qualified and suitable for the position, according to his curriculum and merits, regardless of political considerations.

Draghi surprises

With this elimination of the ‘Manual Cencelli’, Mario Draghi is surprising everyone, but he is limited to continue his usual way. For the first time in a long time in Italy, the appointment of the top management positions of state companies, the prime minister does not discuss his decision even with the leaders of the parliamentary majority that supports the government. Let’s look at the examples cited: The CDP financial group and the railways. Instead of men appointed by the parties with a rigorous assignment of positions according to the ‘Manual Cencelli’, Mario Draghi has chosen has placed fully trusted professionals, prestigious officials who come from the Bank of Italy or from some large companies in which They have proven their competence.

Two examples

To lead the financial group CDP, Mario Draghi has chosen Dario Scannapieco, a Harvard PhD in Economics, Vice President of the European Investment Bank (EIB) and with relevant positions in important Italian companies. Scannapieco replaces Fabrizio Palermo, appointed almost three years ago by the Government of the 5-Star Movement and the League. At the time, Palermo was named at the suggestion of the 5 Star Movement. It is understood that the removal of a trusted person from the party founded by the comedian Grillo and an important interlocutor in the financial world such as Palermo, has created unrest in the 5 Star Movement.

For the Italian Railways (FSI), which controls most of Italy’s regional and high-speed rail network, as well as being the motorway operator Anas, Mario Draghi has chosen Luigi Ferraris, who has been President of the Terna group and with an experience that is considered crucial for the state railways sector, as he has been financial director, among other positions, of the energy multinational ENEL. Ferraris replaces Gianfranco Battisti, who had also been appointed to the position with the support of the 5 Star Movement.

Dance of changes

The dance of senior executive changes has begun and will give a lot to talk about. More changes will be announced in the coming months. The mandates of 74 boards of directors of 90 public companies will expire before the end of the year. Fifteen of them are controlled directly by the Ministry of Finance.

In view of the performance and rigor of Mario Draghi, there is no need to comment on what is seen in Spain with the directors chosen by the government for state companies: Pure cronyism from Moncloa or partisan favors to maintain power.

Some say in Italy that the independence of Mario Draghi and the failure to listen to the parties in the attempt to share power could cost him the presidency of the Republic, due to the discomfort that Draghi’s conduct creates in certain political environments. The former president of the ECB is a possible candidate for the head of state, today without rival. That political bad mood doesn’t worry Draghi. He doesn’t cling to power. He acts conscientiously, at the service of the country, because he considers himself ‘a public servant’.

The change, almost a revolution

For now, Draghi has the support of the Italians. A poll published this Saturday by the Corriere della Sera is clear: The approval rating for Mario Draghi’s work at the head of the Government reaches 66, a far cry from the rest of the political leaders. His government achieves an approval rating of 64, the highest level since he took office (it was 62 then).

To get an idea of ​​the profound change represented by the Draghi method applied to the appointments of public companies, almost a revolution, it is worth remembering a significant episode that was echoed by all the Italian media in its day. With the arrival of Giuseppe Conte to the head of the Government, his faithful spokesman, Rocco Casalino, faced with the independence with which senior professional officials of the Ministry of Economy tried to act, came to make the following threat: «A great revenge is ready in the 5 Star Movement. All 2019 [año de la llegada al poder del M5E y la Liga] we will dedicate ourselves to get rid of all these pieces of shit from the Mef » [ministerio de Economía y Finanzas]. The threat, without naming him, was directed mainly against Daniele Franco, then director in that ministry of the Ragioneria Generale dello Stato, in practice the controller of the public accounts. Today, Daniele Franco, a prestigious economist very loyal to Draghi, with whom he collaborated for years, is the head of the Economy, one of the most influential ministers of the Executive, through whom much of the control and good management of the funds that Europe passes will go to Italy.

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