A crisis is brewing on the streets of Europe.

Mario Draghi’s defenestration has left the Italian — and indeed international — establishment reeling in horror. This is not surprising. When he was nominated as Italy’s prime minister at the beginning of last year, Europe’s political and economic elites welcomed his arrival as a miracle. Virtually every party in the Italian parliament — including the two formerly “populist” parties that won the elections in 2018, the Five Star Movement and the League — offered their support. The tone of the discussion was captured well by the powerful governor of the Campania region, Vincenzo De Luca (PD), who compared Draghi to “Christ” himself.

Everyone agreed: a Draghi government would be a blessing for the country, a final opportunity to redeem its sins and “make Italy great again”. Draghi, they said, simply by virtue of his “charisma”, “competence”, “intelligence” and “international clout”, would keep bond markets at bay, enact much-needed reforms, and relaunch Italy’s stagnant economy.

Alas, reality hasn’t exactly lived up to expectations: Draghi leaves behind a country in tatters. The latest European Commission macroeconomic forecast predicted that Italy will experience the slowest economic growth in the bloc next year, at just 0.9%, owing to a decline in consumer spending due to rising prices and lower business investment — a result of rising borrowing and energy costs, as well as disruptions in the supply of Russian gas.

Italy is also experiencing one of the fastest-growing inflation rates in Europe — which is currently at 8.6%, the highest level in more than three decades. Interest rates on Italian government bonds have also been steadily climbing ever since Draghi came to power, rising four-fold under his watch; today they stand at the highest level in almost a decade.

And this “polycrisis” has taken its toll on Italian society: 5.6 million Italians — almost 10% of the population, including 1.4 million minors — currently live in absolute poverty, the highest level on record. Many of these are in work, and that number is bound to increase as real wages in Italy continue to fall at the highest pace in the bloc. Meanwhile, almost 100,000 small and medium enterprises (SMEs) are at risk of insolvency — a 2% increase compared to last year.

So much for “Super Mario”, then. Of course, one could argue that other countries are experiencing similar problems, but it would be a mistake to let Draghi off the hook. He has been one of the staunchest supporters of the measures that led to this situation, having been a driving force in pushing for tough EU sanctions against Moscow — sanctions that are crippling Europe’s economies, while leaving Russia largely unscathed.

Draghi even boasted about the bold measures adopted by Italy to wean the country off Russian gas — the result being that Italy is now the country that pays the highest wholesale electricity prices in the entire EU. The absurdity of these policies becomes apparent when we consider his attempt to reduce Italy’s dependence on Russian gas by reviving several coal-fired power plants — coal that Italy largely imports from Russia.

Worse still, Draghi did little or nothing to shield wage-earners, households and small businesses from the impact of these policies. Indeed, the few “structural” measures enacted by his government have all been aimed at promoting privatisation, liberalisation, deregulation and fiscal consolidation — such as opening up for privatisation those few public services that had remained outside of the scope of the market, further “flexibilising” labour, putting private beaches up for public tender for the first time in decades, or attempting to expand taxi services to include ride-sharing operators like Uber, sparking massive protests.

For anyone who has an inkling of Draghi’s ideology, this is hardly surprising. As I’ve argued before, Mario Draghi is the bodily incarnation of “neoliberalism”. Neither is it surprising that those policies haven’t delivered, given that the EU’s neoliberal logic, based upon privatisation, fiscal austerity and wage compression — which Draghi has played a crucial role in implementing since the early Nineties — is the main reason Italy is in such a mess to begin with. Draghi also further strengthened the EU’s stranglehold over the Italian economy by relentlessly peddling the narrative that Italy desperately needed the European Covid recovery funds to kickstart its economy, and that in order to access those funds it needed to diligently implement the reforms demanded by Brussels.

Yet in macroeconomic terms, the funds in question are a pittance, and nowhere close to what would be needed to have a meaningful impact on Italy’s economy. But they come with very strict conditionalities. This is ultimately what the EU’s Next Generation EU “recovery fund” is all about: increasing Brussels’s control over the budgetary policies of member states and strengthening the EU’s regime of technocratic and authoritarian control. And who better than Draghi could be trusted with locking such measures in place? As he himself noted, the “reform path” laid down by his government meant that “we have created the conditions for the [EU recovery] work to continue, regardless of who is [in government]” — thus ensuring that future governments wouldn’t stray from the path of righteousness.

Draghi, however, doesn’t just leave behind him a scorched economy but also a deeply fractured and divided society. He is the man responsible for devising the most punitive, discriminatory and segregational mass vaccination policies in the West, which not only excluded millions of unvaccinated people — including children — from social life, by extending vaccine passports to practically all public spaces, but also restricted many people from working. He also helped make the unvaccinated the target of institutionally sanctioned hate speech, such as when he infamously claimed: “You don’t get vaccinated, you get sick, you die. Or you kill.”

All this might offer an indication of why a recent poll showed that 50% of Italians weren’t happy with the government’s work. And yet, in spite of these rather unimpressive results, when Draghi initially announced his intention to resign, the Italian establishment went into an apoplectic fit. In what will go down in history as one of the most pathetic demonstrations of the sycophantic conformism of Italian society, almost every professional category you can think of rushed to launch their own appeal begging Draghi to stay on — not only wealthy businessmen, as was to be expected, but also doctors, pharmacists, nurses, mayors, university deans, NGOs, progressive intellectuals and even the CGIL, the country’s largest union.

Even more pitiably, the Italian media gave massive coverage to several “pro-Draghi demonstrations” — numbering not more than a few dozen people. Perhaps most comically, one of the country’s largest news agencies, Adnkronos, even spoke of how several homeless people had come out to show their support for Draghi. One of these was quoted saying: “Draghi is making the difference. Italy has regained prestige and credibility thanks to him. As a homeless person I can testify to the fact that there’s a greater attention to us now and that’s thanks to Draghi.”

The Western international establishment also threw all its weight behind Draghi. Everyone from the Financial Times to the Guardian to the EU Commissioner for Economy Paolo Gentiloni came out to explain what a tragedy losing Draghi would be for Italy — and indeed for Europe as a whole. Gentiloni went so far as saying that “a perfect storm” would sweep over the country if Draghi were to leave; while the Guardian limited itself to instructing Italy’s MPs that Draghi “should stay for now”. The New York Times unironically claimed that Draghi’s departure would put an end to the “brief golden period” he ushered in for Italy. Talk of foreign actors meddling in Italy’s affairs.

So why, in spite of such massive pressures, did three parties effectively pull the plug on his government last week? Part of the explanation lies in the extent to which Draghi had managed to alienate parties such as the Five Star Movement and the League — refusing to engage with them on hardly any of his government’s policies, or to acknowledge even the most timid criticism. On more than one occasion, Draghi made very clear what he considered to be parliament’s role: that of rubber-stamping the decisions taken by government. This is evident also in Draghi’s abuse of the instrument of the confidence vote.

In his Senate speech last week, Draghi was even more explicit: after saying that he had decided to reconsider his resignation because “that is what the people want”, he essentially told Parliament that he was willing to stay on as premier only so long as the parties would agree not to interfere with any of the government’s future decisions. For many of those present in Parliament, the arrogance and megalomania of Draghi’s speech went a step too far — and moreover some say that Berlusconi was waiting for the right moment to avenge the time he was unseated by Draghi, in 2011, when the latter was president of the ECB.

However, one shouldn’t overstate the importance of Parliament’s anti-Draghi revolt. Ultimately, Draghi did little more than spell out an uncomfortable truth to the parties: “You have no real power, just accept it.” But that is a truth the political parties aren’t ready to accept. Ultimately, they are unwilling to face the fundamental contradiction between the country’s formal institutional architecture — that of a parliamentary democracy — and what we may call its “actually existing” institutional architecture, in which Parliament and by definition the political parties have almost no power whatsoever, because government itself, in the context of the eurozone, has little if any economic autonomy. The parties know this but are unwilling to admit it (to themselves but most importantly to voters).

This leaves them in a state of permanent cognitive dissonance, leading to what we may call “the political cycle of the external constraint”. As in “normal” countries, parties vie for consensus on the basis of different electoral platforms — and as often happens, the parties promising “change” happen to win. However, unlike in “normal” countries, the parties that get into government soon find out that they lack the “normal” instruments of economic policy necessary to really change anything in socio-economic terms. In fact, they have little choice but to go along with what Brussels and Frankfurt say, and if they don’t play ball the ECB is always ready to turn up the heat. At that point, if the government doesn’t back down, the ECB will engineer a full-blown financial crisis (think Italy in 2011 or Greece in 2015) — which usually leads the political parties to turn to EU-backed technocrats to fix a problem the EU created in the first place.

Yet even if the government yields, the growing tension between the requirements of the external constraint and the demands of citizens, which the parties lack the tools to remedy, leads them to turn to technocrats to resolve the impasse, by having them implement the measures the parties don’t want to take responsibility for. Then, at a certain point, usually as new elections approach, political parties feel the need to re-legitimise themselves in the eyes of voters and thus  put the technocratic genie back into the lamp — until the next crisis, which sets a new cycle in motion.

This is largely the story of what happened between 2018 and Draghi’s ouster, as the Five Star Movement and League went from anti-EU populism to Draghi over the course of just a few years. And the next elections will set in motion a new cycle, possibly hailed by a centre-right Giorgia Meloni-led government. But as the social and economic situation continues to worsen, these cycles are also bound to grow shorter and shorter. A future centre-right government — “populist” or not — would have little or no ability to resolve the crises left behind by Draghi. As always, the shots will be called in Brussels and Frankfurt.

With the launch of its recent Transmission Protection Instrument (TPI), the ECB has provided itself with a tool that technically allows it to do “whatever it takes” to close euro spreads, thus potentially averting future financial crises. Such intervention, however, is conditional on compliance with the EU’s fiscal framework and with the “reforms” outlined in each country’s “recovery fund” plans — already locked in place by Draghi. But these will do nothing to end the unfolding social and economic crisis; in fact, they are certain to worsen it. In other words, the next Italian government, if it wants to stay financially afloat, will have little choice but to follow the economic diktats of the EU — or else. In such a context, how long before the last remnants of democratic legitimacy in countries such as Italy break down? And what then?

Ultimately, the next euro crisis is much more likely to break out on the streets of Europe than on financial markets.