Meloni’s Pick as Italy Finance Minister Isn’t Like Predecessors

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(Bloomberg) — The appointment of Giancarlo Giorgetti augurs a different kind of finance minister than what Italians are used to as he takes up one of the most pivotal roles in euro-zone politics. 

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The 55-year-old political veteran and deputy leader of the right-wing League party brings the credibility of having served in the government of Giorgia Meloni’s predecessor as premier, Mario Draghi. But he contrasts with prior holders of the job as being neither a former academic, nor a product of Italy’s technocratic elite.

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That difference in pedigree and Giorgetti’s political background may help foster balance within the governing coalition, a three-way alliance composed of Meloni’s Fratelli D’Italia, the League and ex-Premier Silvio Berlusconi’s Forza Italia. Meanwhile his role in the Draghi cabinet might offer some reassurance to financial markets.

Giorgetti, who emerged as a compromise candidate after weeks of political haggling, will need to steer the euro zone’s third-biggest economy through an energy crisis that threatens to inflict a recession. He will nurse a debt mountain of about 150% of output that has become a perennial headache for the European Central Bank and his counterparts in the region’s capitals.

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“For a politician, however moderate and well-intended, it might be more difficult to deliver and resist to political pressures,” JP Morgan Securities analyst Marco Protopapa said in a note to clients on Thursday. 

Giorgetti wasn’t the first choice for the job. Meloni initially struggled to find an internationally credible figure to calm concerns of both investors and Italy’s European partners. 

ECB Executive Board member Fabio Panetta bowed out of the race, and coalition partners wanted a change from current minister Daniele Franco, so attention began to concentrate on Giorgetti.

As development minister, he worked to reach all his ministry’s targets needed to unlock cash from the European Union’s Recovery Fund including establishing a fund for female entrepreneurship and tax breaks for the digital transition. More recently he has been struggling with how to help protect Italy’s businesses from continued energy-price hikes.

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Every one of his 10 predecessors since the minister of economics and finance position was created in a fusion of roles back in 2001 have been either former academics or officials plucked from the Treasury or Bank of Italy. 

Giorgetti may be different, but what he does have in common with at least four of them is that he is a graduate of Milan’s Bocconi University, where he obtained a business degree. 

In the 1990s, he was part of the far-right youth movement Fronte della Gioventu, linked to Italy’s Movimento Sociale, which is the same political organization that Meloni would join during the same decade. 

He previously headed the budget committee of Parliament’s lower house, and was also cabinet undersecretary for Five Star leader Giuseppe Conte’s administration.

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That places him well to also take on a political role in the government. His appointment is a victory for the League, though not as much for its controversial leader Matteo Salvini, who has often been at odds with the more moderate Giorgetti.

The new finance minister grew up in a small village in Northern Italy near the lake of Varese not far from the Swiss border. His father was a fisherman and his mother worked in a textile plant. 

Married with one daughter, Giorgetti is an avid soccer fan of both his local Varese Calcio team and England’s Southampton, according to Italian media reports.

—With assistance from Marco Bertacche.