What binds Draghi, Franco and Brunetta
Brunetta revealed a secret in her book: Daniele Franco, his former student at the University of Padua and now Minister of Economy in the Draghi con Brunetta government, wrote the letter from the ECB in 2011, signed by Draghi and Trichet.
In the new government there are three old friends: Prime Minister Mario Draghi, the Minister of Economy, Daniele Franco, and the Minister of Public Administration, Renato Brunetta. While the appointment of Franco, general manager of Bankitalia and former state accountant general, was taken for granted on the eve, no one expected Brunetta to return to the scene. Neither do I. Although I knew well how close the personal relationship was between these three friends, having told it in ItaliaOggi six years ago (30 May 2014), taking inspiration from an autobiographical pamphlet by Brunetta (Berlusconi must fall. Chronicle of a conspiracy), which had been Minister of Public Administration in the last government led by Silvio Berlusconi. In that book, Brunetta recounted some unpublished background to the now historic letter with which the ECB, on 5 August 2011, gave a sort of ultimatum to the Berlusconi government, urging the immediate approval, by decree, of a series of structural reforms. as a necessary condition for the ECB to continue supporting Italy's government bonds.
Signed by Jean Claude Trichet, outgoing president of the ECB, and by Mario Draghi, who had recently been appointed his successor, the letter asked to bring forward the balanced budget by one year, with the adoption of unpopular measures, including the pension reform, with stricter rules for seniority; the reduction of the cost of public employment, including the reduction of salaries; the introduction of an automatic deficit reduction clause with horizontal spending cuts; the reform of wage bargaining in the private sector, as well as the full liberalization of local public services and professional services. A tears and blood maneuver, which remained on paper due to internal conflicts in the government. Result: the spread skyrocketed, and after a few months Berlusconi had to resign, replaced by Mario Monti.
Direct witness of those events, Brunetta revealed only after a while, in her pamphlet, a secret: to write the letter of the ECB, signed by Draghi and Trichet, it was actually Daniele Franco, his former student at the university of Padua. Here's how, on ItaliaOggi, his story came out.
Beginning of August, it is evening. In the "green room" of Palazzo Chigi a film is being shown on the Messina Bridge, which has always been a dream of Berlusconi. It was commissioned by the Minister of Infrastructure, Altero Matteoli, to update the premier in a spectacular way. Brunetta arrives suddenly, and asks to speak immediately with the premier for a very urgent matter. But Berlusconi, as if kidnapped by the film, begs him to wait. As soon as the lights come back on, Brunetta announces that a terrible letter is about to arrive from the ECB, "perhaps ready, perhaps in draft". A letter that would have wiped out in one fell swoop, not only the Messina Bridge, but all the great works, perhaps even the government and national sovereignty if it hadn't been urgently remedied. Brunetta writes: «We go to the president's office. There is Gianni Letta, Undersecretary to the Presidency. I say everything. The afternoon interview with an absolutely reliable source, which announced the intention, the orientation, the decision, is still not clear. Berlusconi understands everything on the fly. He understands that it is done. If we anticipate the balanced budget by a year we save ourselves, otherwise we are dead ».
The premier's reaction is swift. He calls Draghi on the phone, tells him that he heard about the letter, that Minister Brunetta, who is there by his side, informed him, and he "understood very well the terms of the matter: that is to say that the European Central Bank would continue to buy our securities on the market, cooling the speculative fire, only if we had given additional answers in terms of economic policy, rigor and reforms ». Further on: «Draghi on the other side of the phone confirms and President Berlusconi passes it to me. Me: 'Hi Mario'. Mario Draghi is an old university colleague of mine, he confirms exactly the indications, the intentions and tells me that Daniele Franco was working on this letter in the Bank of Italy (by now it was clear that this was what it was). 'Are you calling him?' He says. Of course".
As it happens, Brunetta and Daniele Franco, then central director of the economic research area at the Bank of Italy, had known each other for some time. "He was my student at the Faculty of Statistics at the University of Padua in the early 1970s, when I too was very young," recalls the former minister. "As soon as I got back to the ministry, I call him, and after ten minutes he was already standing by me with some papers in English in his hand." It is the draft of the letter from the ECB. “I still don't know where those papers were physically elaborated, whether at the ECB headquarters or elsewhere, perhaps at Palazzo Koch (headquarters of the Bank of Italy; ed). I know that Franco explains them to me, essentially giving me the guideline of the document, which will later be known as 'the' letter from the European Central Bank to the Italian government ”.
On August 5, in the afternoon, as soon as the official letter from the ECB arrives, Brunetta goes to Palazzo Grazioli to examine it with Berlusconi. "It will remain confidential, I'll make a working copy of it," writes the former minister, who suggests to Berlusconi that he convene a press conference to give an immediate response, with concrete decisions. The premier accepts the advice, but begs Brunetta not to take part in it so as not to irritate Giulio Tremonti, who still knew nothing of that letter. "I was disheartened and immediately angry," confesses the former minister. Tremonti, during the press conference, appeared «very embarrassed. Unprepared. Obviously disappointed. He also gave the voice to Berlusconi, denying him on the point that the social partners were informed of what they were announcing ». Gianni Letta maintained an "imperturbable and forbidden posture". Of that press conference, Brunetta reports in the notes of the book the transcription word for word, "for the use of historians and the curious". It was then that, for Italy, the renunciation of national sovereignty began, then implemented by the government of Mario Monti.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/draghi-franco-brunetta/ on Sat, 20 Feb 2021 16:00:37 +0000.