Who is Europe’s most powerful man?

Political Economy

Finest Hour for Draghi and Europe

Who is Europe’s most powerful man? If one phrased the question differently — who is Europe’s most powerful person? — the answer might well be Angela Merkel. But the deliberate use of the masculine excludes the German chancellor, leaving the field open to Mario Draghi.

This answer can, of course, be disputed. How can one compare power in economics with power in, say, religion? Is it possible to rank the technocratic European Central Bank boss on the same scale, for example, as the pope?

The best place to start is with an attempt to understand what power is. The British philosopher Bertrand Russell said it was the production of intended effects. By contrast, Steven Lukes, one of the top contemporary power theorists, said in an interview last week that power was the capacity to make a difference in a manner that is significant.

What’s appealing about the way that Mr. Lukes, a professor of sociology at New York University, puts things is his use of the word “significant.” Whereas Mr. Russell just looks at whether people can get their way, the introduction of significance allows us, as observers, to take a view about whether powerful people are affecting things in a manner that matters to us.

That, in turn, allows us to rank individuals’ power. We can decide that right now in Europe, what matters most is navigating the current euro crisis and pick our ranking with that in mind. That, indeed, is my view — which, of course, is somewhat subjective.

Let us return to Mr. Draghi, whom I have known since the mid-1990s. To see why he is so powerful, it is worth considering the three P’s of power: position, personality and pivot points. Having a position that enjoys authority; possessing a personality that is astute enough to maximize the use of that authority; and operating at a point in history where one’s actions have the chance to be pivotal — all these are important ingredients in the power mix. Mr. Draghi scores highly on all three.

Look, first, at position. The E.C.B. has the sole authority to print money for the 17 member countries of the euro monetary union. Mr. Draghi has used this power to huge effect since he took over as president in November 2011. First, the E.C.B. lent banks €1 trillion, or about $1.3 trillion, helping to avert a banking crisis.

Then, in July, during a particularly hot phase of the crisis, Mr. Draghi uttered his famous phrase about doing within the E.C.B.’s mandate “whatever it takes to preserve the euro,” adding, “and believe me, it will be enough.” The E.C.B. later spelled out its willingness to spend potentially unlimited sums of money buying sovereign bonds. The markets calmed down.

The E.C.B.’s power does not just come from its money-printing authority, but also from its independence — which is enshrined in the Maastricht Treaty that established the European Union. Although its president is appointed by politicians, he gets an eight-year term. Once he is in place, he can only be removed in the event of incapacity or serious misconduct. Unlike prime ministers and presidents, he does not have to face the electorate. Mr. Draghi is in an especially strong position because his term has seven more years to run; he is not remotely a lame duck.

The Italian central banker, though, has not just relied on this strong position. His personality is particularly well suited to wielding power. For many years, he survived and thrived while playing Rome’s power games. This is partly because, like a chess grandmaster, he always thinks several moves ahead. That gives him a good understanding of the dynamics of a situation.

Mr. Draghi also gives huge importance to credibility. Through his orthodox central banking rhetoric, he convinced the German people that he was really not from Southern Europe at all. If he had been considered to be more Italian, he would not have gotten the E.C.B. job in the first place. Bild, the influential German tabloid, even celebrated his nomination as E.C.B. president by running a doctored photo of him wearing a Prussian spiked helmet.

Bild did turn on Mr. Draghi after his promise to buy potentially unlimited quantities of sovereign bonds. But, critically, Ms. Merkel — whose approval was not required but whose tacit support gave him valuable cover — did not.

Mr. Draghi’s credibility with the markets has also magnified his influence. So much so that he has not yet even needed to buy a single sovereign bond.

Position and personality, though, are not the only ingredients of Mr. Draghi’s power. He has taken the role of E.C.B. boss at a pivotal moment, when the power to print money is crucial. In a financial crisis, the ability to supply liquidity is of paramount importance.

Mr. Draghi has understood the importance of pivotal points in history and used his position and personality to have a big impact. As such, he scores AAA on the three P’s of power — in a way that puts him ahead of, say, Mario Monti of Italy or François Hollande of France, neither of whom would get straight A’s.

The E.C.B. boss should not let the plaudits go to his head, however. Much of the euro zone is in deep recession. If growth does not return, the crisis could enter a new ugly phase, and his powers will be sorely tested.

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