Even the critics have to admit one thing to Mario Draghi: he remains true to his principles.
In summer 2012 he rushed ahead as head of the European Central Bank (ECB) with his historic “Whatever it takes” speech and promised to do everything possible to save the euro.
Cost what it may.
Now - almost nine years later - he is using his position as Italian Prime Minister to place the next historic bet.
He starts the largest debt program in the European Union to get Italy out of the permanent crisis.
In the first few months of his tenure, Draghi topped up his previous government's deficit-financed economic stimulus plan by over 70 billion euros.
This adds up to the new debt to well over 170 billion euros.
Draghi's government expects this year's budget deficit to skyrocket to 11.8 percent of economic output.
Source: WORLD infographic
That would not only be the country's highest level of new borrowing since the early 1980s, but also - measured in terms of gross domestic product (GDP) - the largest economic stimulus program in Europe.
"Draghi is betting the house," commented the Bloomberg finance agency on the budget.
Indeed, as premier, Draghi could write Italian economic history.
The debt ratio is likely to rise to 160 percent of GDP this year, surpassing the previous record that the country set after the First World War.
In 1920, shortly before the era of the fascist dictatorship of Benito Mussolini, the state marked the previous high of 159.5 percent.
The high budget deficit is also remarkable because Italy can count on around 209 billion euros from the European aid fund.
It was only on Sunday that Rome announced that it would submit the national plan for the use of the billions in Brussels punctually on April 30th.
Joe Biden has also launched a mega-stimulus package
Draghi apparently acts from the conviction that Europe's economies will be stronger in the long term if fiscal and monetary policy work together.
It is based on the USA, where the new President Joe Biden introduced a $ 1.9 trillion economic stimulus package as his first official act, which also increased new debt by around ten percentage points.
The European deficit rules, which are intended to limit new debt to three percent of economic output, are suspended until 2022 due to the pandemic.
But Draghi's deficit plans are far more aggressive than those of any of his European counterparts.
They signal an open departure from the fiscal solidity provided for by the rules of the monetary union.
“Judging from yesterday's eyes, such a high level of new borrowing would be very worrying.
Today we look at things very differently because the pandemic legitimizes the use of debt, ”said Draghi, explaining his plans.
The native Roman appears again as a kind of taboo breaker.
Even as head of the ECB, he had signaled to the markets with his famous promise that he was ready to push monetary policy to its limits.
Draghi not only pushed through bond purchase programs at the ECB, which were particularly controversial in Germany.
It was also he who introduced penalty interest on bank deposits and thus effectively abolished interest for German savers.
While driving the ECB's monetary policy with billions in bond purchases and ever lower interest rates, Draghi often expressed his frustration during his time in Frankfurt that the governments of the euro zone would not support the economy with stronger fiscal policies.
Now that he has control of the fiscal levers in the EU's third largest economy, he is continuing his whatever-it-takes policy in Italy.
"Draghi himself said it was a bet," said Veronica De Romanis, professor of European economics at Luiss University in Rome, the Bloomberg financial service.
"But it's the only chance we have."
Source: WORLD infographic
There are more than two lost decades behind Italy.
The economy has stagnated since joining the euro, the bottom line being a meager plus of two percent.
For comparison: In France and Germany, economic growth since 1999 has been 28 percent each.
Spain's economy expanded by as much as 35 percent in the same period.
There wasn't much to be gained for Italian investors either.
Since 1999, the Italian FTSE MIB index, including dividends, has increased by just 22 percent, which is less than 1.2 percent per year.
The Dax, on the other hand, gained 194 percent in value, the American Dow Jones even 528 percent.
Bet on Italy's recovery
So far, the bill seems to be working to a large extent.
The players in the bond markets are not yet too frightened by Draghi's shirt-sleeved debt policy.
The risk premium of ten-year Italian bonds compared to German government bonds with the same maturity increased by just 0.06 percentage points.
Obviously, the market participants assume that in case of doubt the ECB will come to Italy's aid with bond purchases.
Anyone who thinks that Mario Draghi will win his bet can take part with the Lyxor MSCI Italy index fund (NASDAQ: ETF032).
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