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The Draghi Power Triangle

Italy's new prime minister, Mario Draghi, is not solely someone whose credibility in financial markets can lower the Italian borrowing costs and boost Italian stock prices. As he showed in his maiden address, he is a student of history, with strong democratic values and strategic capabilities that Europe badly needs.

STANFORD – Mario Draghi’s first speech as Italy’s prime minister made clear that his national unity government will not only be about domestic Italian politics and policy reforms, but about Europe, too. Draghi has signaled nothing less than a dramatic reconfiguration of European policymaking, with major consequences for Europe and the European Union’s relations with Russia and the United States.

As prime minister, Draghi will be a member of the influential European Council; in fact, he should be one of its core leaders, along with his French and German counterparts, Emmanuel Macron and Angela Merkel. As Jörg Asmussen, a member of the European Central Bank’s executive board when Draghi was ECB president, put it shortly before Draghi’s installment, “European politics might shift into more of a triangle.”

Asmussen was right. In his maiden speech to Italian lawmakers, Draghi stressed that Italy would “need to better structure and strengthen the strategic and essential relationship with France and Germany.” Clearly, the reconfiguration of European politics will be a top priority for his government. “Without Italy, there is no Europe,” Draghi said.