Draghi at the Quirinale? Goldman Sachs vetoes Recovery at risk

Finance does not like the idea of ​​appointing Mario Draghi as President of the Republic, not for a personal matter, but because the former president of the ECB represents a sort of guarantee for the implementation of the Recovery Plan. The US investment bank Goldman Sachs says so, expressing negatively on his appointment of the current Premier at the Quirinale, on the occasion of the election of the head of state to be held on January 24th, although the consensus gives him the winner over any rival .

For Filippo Taddei, Goldman Sachs chief economist of Southern Europe, “the election of Draghi al Colle would strengthen Italy’s and its policies’ ties to Europe, but at the same time would feed the uncertainty about the new executive and its political effectiveness “.

Considering the fragmented majority and the slowness with which governments are formed in Italy, the experts say they are” worried “about the possibility that the appointment of Draghi al Colle could cause a “delay” in the implementation of the Recovery and reforms, even more so if this led to early elections, given the impossibility of forming a new government with the current majority. “Political continuity would be seriously threatened – they underline – weakening the Italian commitment on the Recovery front”.

The hypothesis of Draghi staying at Palazzo Chigi is therefore given as more probable by Goldman Sachs, compared to the other eligible candidates, including Romano Prodi, Mario Monti and Giuliano Amato. But the investment bank warns that leading the government in 2022 will prove to be “more challenging” for the Premier than in 2021, due to the presence of a large and heterogeneous coalition and the escalating tensions that will guide politics towards general elections in the spring 2023.

Beyond this, Draghi will prove to be the ideal choice for Palazzo Chigi and will be able to take advantage of the special administrative powers guaranteed by the governance of the Recovery. Otherwise, his resignation could reduce the use of EU subsidies (39 billion) granted by between 50 and 75%, reducing the fiscal impact to GDP growth by 0.1% in 2022 and by 0, 35% in 2023. This negative impact would increase in the event of early elections (-0.15% in 2022 and -0.55% in 2023).