Italy, Monti and Draghi: the case for skilled individual negotiators as catalysts for EU influence?
Marianna Lovato, University College Dublin
Much like its men’s national football team – who won the 2020 European Championship only to be knocked out of the 2022 World Cup Qualifiers by North Macedonia – Italy’s performance in EU-level negotiations is inconsistent at best. How is it that one of the Union’s founding members, not to mention the third economy of the EU with a sizeable administrative capacity, has such a patchy record in terms of negotiation success at the EU level? Based on rationalist accounts of EU decision-making, one should expect a country with Italy’s economic weight and voting power to have a much better – and more consistent – track record when it comes to negotiation success at the EU level. And yet, Italy can easily prove to be an indispensable broker at times and a laggard at others. In my recent JCMS article, I argue that turning to the interplay of member states’ administrative capacities, political dynamics and individual negotiators’ characteristics might help account for Italy’s puzzling performance.
Scholars have long emphasized the importance of countries’ administrative capacities and bureaucratic structures for their ability to shape the EU decision-making process. Specifically, the development of a formal structure dealing with EU policies, the level of coordination within and between Ministries – as well as between parliament and the executive – and the effectiveness of coordination bodies on EU policies all affect a country’s performance in EU negotiations.
From larger member states like France and Germany to the smaller ones like Belgium and Sweden, domestic politics matter for a member state’s ability to influence EU negotiations. Relevant political factors include variables such as political stability, intra- and inter-party tensions, the cohesion of the parliamentary majority and the predisposition of the political elites towards Europe. Indeed, unstable governments, internally divided majorities and eurosceptic elites all concur to undermine a member state’s bargaining power in EU negotiations.
Finally, individual negotiators tend, for better or worse, to leave their mark on EU policy outcomes as well. Skilled ones can leverage their own expertise and connections to further their member state’s interests in the negotiations. Conversely, negotiators lacking the necessary experience, know-how and networks to effectively make their voice heard in Brussels tend to be ignored by their counterparts. The role of individual negotiators deserves even more attention after the Lisbon Treaty reforms, which have strengthened the influence that heads of state and governments exercise across all policy areas.
If, individually, these three sets of factors have a direct effect on EU negotiation outcomes, looking at their interplay provides even more interesting answers to Italy’s perplexing performance at the EU level. Indeed, an individual leader’s ability to shape the negotiations can be critically constrained by the political and administrative domestic context in which they act. A high rate of government turnover implies a frequent change of negotiators with varying degrees of expertise. And while civil servants might remain the same, a new executive implies a change in ministers, who play a critical role in the later stages of Council negotiations. In turn, political dynamics and coordination mechanisms influence one another – and the member state’s overall bargaining power – in critical ways. If, as it is the case in Italy, the coordination mechanism on EU policies is an ad hoc system, it tends to vary from one government – and one set of negotiators – to the next. Moreover, any political tensions or animosity that might arise within a coalition government will likely hinder domestic coordination between different ministries.
In a nutshell, the article contends that these three sets of domestic factors – and their interplay – moderate the degree of bargaining power available to a given member state and, as a result, shape the negotiation success that member state can achieve.
In my article, I provide evidence as to the effect of these domestic factors in the context of two EU negotiations concerning fiscal policies, one representing a case of negotiation success for Italy (the European Stability Mechanism, ESM) – and one an instance of negotiation failure (the Bank Recovery and Resolution Directive, BRRD). These two case studies help illustrate the role of domestic factors in either limiting or enhancing a country’s bargaining power in EU negotiations.
Following the 2011 sovereign debt crisis, the pressing need for prompt countermeasures led the EU and Eurozone member states to turn the European Financial Stability Facility into a permanent bail-out fund, the ESM. On 11 March 2011, member states formally agreed on the establishment of the ESM, formalizing the decision through an ad hoc Intergovernmental Treaty, signed on 2 February 2012. The ESM, however, would only be inaugurated in October 2012. In the months between its establishment and entry into force, member states held further discussions as to how exactly the various ESM instruments should operate, including the eligibility criteria for loans. Over the course of the negotiations, political stability, efficient co- ordination and, above all, individual negotiators’ skills allowed the Italian government to leverage a considerable amount of bargaining power, thus securing its interests in the negotiations. In particular, Silvio Berlusconi’s resignation from office in November 2011 and the arrival of Mario Monti at the head of a technocratic government turned things around for Italy. Former Commissioner for Internal Market and then for Competition Policy, Monti quickly set up a highly efficient domestic coordination mechanism, placing trusted colleagues at the head of the Ministry of European Affairs and Ministry of Finance, working closely with the Bank of Italy and reporting regularly to Parliament. Enjoying a continued period of domestic political stability, Monti capitalized on his coalition-building efforts with France and Spain to obtain last additional concessions on the ESM at a pivotal Eurosummit in June 2012.
With the BRRD, European governments and EU institutions sought to establish a framework to regulate the management of failing banks with minimum risks to financial stability, while also reducing the costs for taxpayers and sovereign debts. As often happens in negotiations on financial and fiscal policy, a Southern and Northern European camp soon emerged. If the expertise and specialized knowledge of Italian negotiators from the Finance Ministry and Bank of Italy was evident to their counterparts in the Commission and across the other member states, the considerable levels of political instability that Italy experienced during the negotiations (2008-2013) significantly curtailed the efforts made at the technical level. Indeed, the constant changes in the executive made it impossible for Finance Ministers to capitalize on the efforts made at the technical level by well-coordinated and skillful negotiators. What is more, the case of the BRRD negotiations shows that an overall favorable domestic context is a necessary – but not a sufficient – precondition to ensure negotiation success. In particular, the lack of support at the EU level – primarily in the form of firm opposition by Northern European member states – prevented Italy from leading blocking coalitions and engaging in veto threats, ultimately leading to a very low degree of negotiation success for Rome.
In short, the ad hoc nature of domestic coordination mechanisms on EU policymaking, coupled with the systemic instability of Italian politics and the consequent turnover in negotiators at ministerial level, results in an inconsistent performance in EU negotiations. Specifically, if in the case of the ESM negotiators’ expertise, an efficient coordination mechanism and political stability ensured the successful promotion of Italian interests; the negotiations of the BRRD show that frequent government turnover can hamper the efforts of expert and well-coordinated civil servants.
Most recently, the interplay of administrative, political and individual domestic factors can help explain Italy’s role in the current EU-level negotiations on Ukraine. Much like Monti, Mario Draghi is leveraging his non-negligible reputational capital, which he (also) accumulated thanks to his performance as ECB President, to revendicate a place of prominence for Italy in addressing the several crises that the Union has had to face over the last few years, including the response to Russia’s invasion of Ukraine (Horowitz 2022, O’Leary 2022, Malingre 2022, Ladurner 2021). The presence of individual negotiators of the caliber of Draghi even earned Italy The Economist’s nomination as country of the year in 2021. The recognition was unmistakably due to Draghi himself, hailed by The Economist as ‘a competent, internationally respected, prime minister’. Likewise, POLITICO recently named Draghi the most powerful person in Europe, praising him for ‘lending his significant gravitas to a country that has long punched below its weight in the European arena’. The significant influence that Draghi came to wield in Europe was also possible thanks to the support of almost all parties in parliament. And yet, nothing in Italy is as short lived as political stability. Recent domestic political squabbles among governing parties – made all the more acute by such a large and diverse ruling coalition – are threatening Italy’s effectiveness at the EU and international level. Only a few days ago, Draghi’s trip to Madrid for a historic NATO summit had to be cut short by multiple parties’ attempts to sabotage the stability of the governing coalition (Sesto 2022, Roberts 2022).
Among other things, the article hopes to serve as a reminder that, despite populist parties – both in Italy and abroad – advocating for a rejection of “technocrats” and “experts” like Mario Draghi, it is precisely those skilled individual negotiators who help make the difference between irrelevance and influence at the EU level.
Focusing on the interplay of domestic factors not only helps better account for Italy’s inconsistent performance in EU negotiations, but can offer promising results for other member states and policy areas as well. As it turns out, political tensions arising from coalition infighting, the efficiency of domestic coordination on EU policies and the expertise of negotiators shape bargaining outcomes for Rome as much as they do for Berlin, Warsaw or Madrid.
"ECB President Mario Draghi at the EP" by European Parliament is licensed under CC BY-NC-ND 2.0.