«Mario Draghi will have a successor, but he cannot be substituted». For seven years, the president of the ECB is more than a central banker. He has become a mythical, mystical figure. It is one of the few that on the continent has auctoritas and potestas and also, in certain circles, even a halo of holiness. They call him SuperMario , the man who saved Europe, the only statistic on the continent. Max Weber would say that, in his own way, the Italian combines elements of traditional, charismatic legitimacy and legal-rational power. And for all this, his impending withdrawal worries a lot.
In the coming weeks, Draghi, Jean-Claude Juncker and Donald Tusk will yield the witness after eight and five years respectively in their positions. A stage full of symbolism, drama, but also hope is closed with them. With the lowest moments, but also where the capacity for resistance and recovery, time trial management, coordination on the edge of the precipice in the Union was seen. In Brussels many people say out loud that "we are going to miss very much" the Polish and the Luxembourg, two powerful personalities and with a very clear idea of Europe, of history and of the importance of the rule of law and institutions. But what Pierre Moscovici and others say about Italian is different. From him they think it cannot be substituted. And that is a lot to say.
In a biography published just a few days ago, Alessandro Speciale and Jana Randow, two of the great specialists in the most technical and opaque institution of the EU, baptize Draghi as the architect . The polysemy of the term reflects extraordinarily well all the dimensions of the "man who saved the euro," as the title of the essay reads. An architect is the one who cultivates the fine arts, and there is no finer than being a central banker when from the window of your office in Bankfurt , as they call the city, you see the old and intimidating building of the Bundesbank.
An architect is also the one who executes a work with skill or dexterity, and carrying the monetary policy of the Eurozone in the blackest moment of its short history, with the market guillotine hanging every day, requires both qualities and some more. Draghi, the man who took care of his brothers at age 16 when his parents died, is a serious, short-lived leader. "Analytical," which "asks difficult questions and listens to the answers." He never shouts but he has "a dry and caustic mood," as Speciale and Randow explain in his excellent research, and he knows how to use it to harm.
But, perhaps even more important, the word architect describes who "has art to get what he wants" and who "is the cause of something." Draghi is not going to go down in history, but it occupies a prominent place in it for five years . Absolutely nobody discusses it. His critics, because they consider that the economic system has crammed with asteroids until it becomes an uncontrolled monster. That it has broken the mechanisms of discussion in the entity, polarizing, created factions and deliberately renounced the consensus to divide the Government Council as never before when clouds of recession arrive.
His fans, and is perhaps the first banker since Greenspan to have a global legion of followers, adore him for his courage and practicality. For putting the weight of the Eurozone on his shoulders when presidents and ministers threw the tackle to the head and used Europe as a scapegoat. Being one of the most internalized have that the euro is not (only) a currency, but a political project of vital importance. And of course, for keeping the currency alive with its famous 16 words, the miraculous whatever it takes in July 2012 with which it managed to placate the markets and stabilize the sovereign debt.
The Italian has placed central banking at the center of politics. Not because of the pressure that governments are trying to put in, but also to turn it into something sexy. What was once the preserve of experts and technocrats today is a destination desired by ministers. A position of real power, of influence, from which to influence monetary policy, but also the fiscal and integration process. An unequaled grandstand, a pulpit, for millions of people, and billions of euros, listen carefully and fervently to each sermon.
In his eight years of presidency, Draghi has made it clear that in his vision, the ECB's role goes well beyond the mandate of keeping inflation below but close to 2%. That that is a means and should not be an end. That is why he thinks more in the long term and not in the fact that he has actually been at 1.2% on average. And that's why the hawks look suspiciously at his management and hopefully his replacement.
Few remember him, but his arrival came after an intense fight between Angela Merkel, Nicolas Sarkozy and Silvio Berlusconi . Not as hard as that of Wim Duisenberg and Jean-ClaudeTrichet , but long and tense. Two intense years that finally boosted the disciple of Stanley Fischer, already known as Supermario for his management at the head of the Italian Treasury under 11 different governments.
The holders of the time of their appointment referred to the "Goldman Sachs manager" and the bad practices of the entity helping the Greek Government to make up the accounts, an operation that eventually triggered the most serious crisis in the euro. His fights with Mario Tremonti were known . His individualistic, hierarchical character. And its comfort among elites, political, economic and intellectual.
He studied in a 'high school' with Luca Cordero di Montezemolo , former president of Ferrari. At MIT, two Nobel prizes of the likes of Modigliani and Solow took their thesis. And he shared promotion and spaces with Olivier Blanchard, Lucas Papademos or Ben Bernanke , world-class figures years later.
Once in office, the Italian understood from the first day the importance of the blows of effect and style . That is why his first decision, in November of that same 2011, was to promote a drop in interest rates, from 1.5 to 1.25%. And the following month, another. Over time, unconventional measures, bazooka, unrestricted monetary operations (UNWTO), bond purchases, wild liquidity auctions, quantitative expansion and the eternal hatred of the Hanseatic would come.
With it he changed the management and responses of the institution, from the prolonged, rhetorical and even philosophical of Trichet to much more seas, aseptic and direct. The Frenchman learned German to read Goethe, traveled throughout the country doing pedagogy and gave more than 80 interviews. Draghi no. He goes to Rome or Milan on weekends, expresses himself in English and more than two years ago from his last interview.
During the crisis, the president has changed not only the culture of a mastodontic institution, powerful but slow, full of talent and rigidity, but in some ways the foundations of the economic debate on monetary policy. So leave a bank that has understood better than many others "the new normal" , the paradigm shift. The fact that massive purchases of financial assets do not necessarily imply more inflation and the need to completely reorient the worldview.
What happened to his predecessors in office?
Drop down
We don't know what the history books about Mario Draghi will say in 10 or 20 years, but we do know what they already say about their predecessors: Wim Duisemberg and Jean-Claude Trichet . The first is remembered without sorrow or glory. The second, with more grief than anything else. Surely the opinion is unfair in both cases.
His careers are inseparable. When the ECB was founded, France considered that the presidency belonged to it, since Germany obtained the headquarters of the institution. However, a skilled management achieved a majority so that the Dutchman became the first person to sign the single currency notes. After four years, yes, breaking every written and unwritten rule of respect for independence, his departure was forced to accommodate the Frenchman.
The Dutchman, with experience in the private sector, the Government and the IMF, seemed a book candidate. Solid and sober. Its management was efficient, without frights and crowned by the historical introduction of the currency. Forging the foundations of the Governing Council and betting on consensus, as Eugenio Domingo Solans, the Spanish who was part of it, emphasized. But it was also a mandate full of small errors, misunderstandings and manifestly improvable communication.
Trichet was, however, very different. His mandate will be marked by two controversies. The first, his arrival, with the unbearable pressure of Chirac on his partners and the Dutch Government until Duisenberg had no more than voluntarily agreed to resign after four years and make way. The second, its decisions in pure monetary policy. His work has not passed well over time. Anatole Kaletsky, perhaps one of the toughest critics, said in 2011 that he was "with his hands stained with the blood of the euro" and "a legacy of nationalist tensions and bank chaos."
The witness passed to Draghi with the Greek debt crisis, serious problems of supervision of the entities and especially with the stigma that will accompany him for life; yield to the pressure of the Bundesbank to raise the quarter-rate rates in July 2008, on the eve of the biggest recession of the last 60 years. He has never accepted that it was a mistake.
But it has also broken many bridges. On Thursday, when he appears for the last time after the Governing Council, he will know that he leaves enemies and too many doubts. The German Sabine Lautenschläger resigned last month. He has received brutal and open criticism from governors as powerful as those in the Netherlands and France. He has ignored the recommendations of the house think tank . And there are more and more those who believe that he has not been able to measure and has wasted the last bullets of the depleted sand of unconventional measures, leaving as a legacy a much stronger and stronger institution, but also a weak and doped economy. Before the crisis, the ECB balance accounted for 12% of the GDP of the euro zone. Now, around 40%, more than 4.4 billion euros.
In The Age of Turbulence, Alan Greenspan lamented how politicians believed him "a nuisance. If the economy is expanding, they want to expand it faster. If they see an interest rate, they want it to be lower, ”he wrote. And evoking William McChesney Martin Jr , president of the FED in the 60s, supported the idea that the role of a good central banker "is to take the punch source when the party begins to cheer up."
Draghi arrived at a depressing party on a wounded continent. A Eurozone in which pessimism spread and tragedy was bordered, with helplessness, division and an exasperating slowness. He managed to refloat a stunted institution and contribute to the revival of the economy and the agility of responses. But paying a price. Frankfurt's exit comes at a good time, before dark times return and critics blur the halo. What remains to be seen is whether he is really at the end of his career.
Many see him in Rome, perhaps following in the footsteps of Carlo Azeglio Ciampi , who in 1993 left the headquarters of the Bank of Italy in Palazzo Koch to become the prime minister and then president. Draghi tells how in the European Councils he was very comfortable surrounded by Monti, Rajoy or Van Rompuy , all educated, like him, among the Jesuits. Some in Germany reproach him for his excess of prominence in the latest measures, pointing precisely to a possible leap to politics. They reproach him that ambition pushed the hibris and that is why he did not know how to withdraw the punch source in time. The taste of glory, and power, is too sweet. Even - or especially - for the man who saved the euro.
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