In 2012, Mario Draghi was president of the European Central Bank, and during a visit to London, he made a speech that was a turning point in the fight to save the euro. In particular, it was these words that did the trick:
Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.
We could argue about the extent to which the ECB stuck within its mandate, but, with those words and the policies that followed, Draghi, a well-respected figure in the financial markets, rescued the embattled single currency. Whether that currency, in the form it then was (and still is) should have been rescued is a different question. Spoiler: No.
Time moves on, and in 2019 Draghi was appointed as, essentially, Italy’s technocratic prime minister.
But while Draghi considered that the euro was worth saving, whatever it takes, the same, clearly, is very far from the case when it comes to Ukraine.
Any sanctions that may be imposed on Russia by the European Union should not include energy imports, Italian Prime Minister Mario Draghi said on Friday.
Draghi told reporters that the European Union was studying various sanctions options if Russia pushes ahead with a feared invasion of Ukraine.
“We are discussing sanctions with the EU and in the course of these discussions we have made our position known, that they should be concentrated on narrow sectors without including energy,” Draghi said at a news conference.
Oh.
The next line explains why:
Italy imports 90% of its gas requirements, with Russia a key supplier.
Draghi also added this not uninteresting sentence:
“Putin has talked of the possibility that Russia will continue to guarantee its supplies (to Italy) and increase them if necessary.”
From a report in the Financial Times the same day (but seemingly written earlier):
Italy will spend €8bn to shield consumers, industry and local authorities from rising energy prices and support the auto industry, as spiralling electricity and gas bills threaten to undermine pandemic recovery.
Mario Draghi, prime minister, also warned that any international sanctions targeting Russia’s energy industry — in response to aggression against Ukraine — would hit Italy particularly hard.
“All sanctions that impact energy will impact Italy more than any other country because we are gas-dependent, unlike France and Germany,” Draghi said, while unveiling the energy package.
“Sanctions must be effective but sustainable,” he added.
The EU Commission’s president (its top bureaucrat), Ursula von der Leyen, has since reacted to Draghi’s comments with the reassurance that:
“LNG gas from other sources and a pipeline network throughout Europe would make it possible to bring the necessary gas to Italy.”
I doubt if Draghi will be reassured by that reassurance.
According to Statista, natural gas accounted for 45 percent of Italy’s energy mix in 2018, compared with 16 percent for Germany in 2020. In 2020, some 40 percent of Italy’s gas came from Russia. As noted above, Italy imports almost all its natural gas.
Italy’s vulnerability is yet another reminder of the way that the EU has left itself dangerously exposed to Putin despite years of mounting evidence suggesting that this was not the way to go. One consolation is that Italy has the EU’s largest strategic gas reserves.
Italy operated a total of four nuclear power plants starting in the early 1960s but decided to phase out nuclear power in a referendum that followed the 1986 Chernobyl accident. It closed its last two operating plants, Caorso and Trino Vercellese, in 1990.
In late March 2011, following the Fukushima Daiichi accident, the Italian government approved a moratorium of at least one year on construction of nuclear power plants in the country, which had been looking to restart its long-abandoned nuclear programme. In a poll held in June of that year, 94% of voters rejected the construction of any new nuclear reactors in Italy.