Drudi, the Bocconian in Charge of Rescuing States

Last spring, when the Eurogroup gave the green light to the payment of the second loan installment to Greece for its macro-economic adjustment program, the Italian who rejoiced most is likely to have been Francesco Drudi, the Bocconian (1985 BA in Economics and Social Sciences in 1985) who headed the European Central Bank's delegation in the talks with the Greek government on the country's bailout program. "The tangible progress on structural reform in various fields, from pensions to the financial system, seen upon the first review of the program, and especially early signs of economic stabilization are good things, which reduce the risk of the operation and highlight the ability of the euro area to tackle even the most difficult problems," he says. "In order to fully reap the fruits of this, it is important that the government of Greece clearly signals that it continues to fulfill its share of the program's objectives."

➜ In recent years you have led the ECB delegation to Cyprus, where a debt crisis was also overcome. What were the decisive elements of the solution?
What was decisive was precisely the attitude of the political authorities, who supported the objectives of the program and supported them in public, increasing its political acceptability and decreasing the resistance of Cypriot public opinion. Cyprus' was an eminently financial crisis, more circumscribed as field of intervention with respect to Greece and with lesser social repercussions. Also our program mostly concerned the financial sector.

➜ When did you realize that you had solved it?
When, in 2014, the CEO of the county's largest bank, which had had suffered the most, announced that he was able to achieve a massive recapitalization, attracting fresh foreign capital, only a little over a year after the most dramatic phase of crisis. The program then ended a year and a half later, but that was a very important signal.

➜ After graduating from Bocconi, you earned a PhD in Finance from New York University and then worked at the Bank of Italy and the European Central Bank. What made you decide this career path?
The experience of the Bocconi Degree in Economics and Social Sciences pushed me towards doctoral studies. I came back to Italy for personal reasons with the aim to continue doing economic research and at the same time contribute to economic policy decisions. The natural policy institution where I could capitalize on my finance skills and my background in international macroeconomics was the Bank of Italy. In 1998, the coincidence of various circumstances took me to the European Central Bank. I had arrived at a decisive moment for my personal and professional development: the ECB was launching the single currency, and the prospect of helping to start a common monetary policy was particularly attractive.

➜ How has your work changed during the years?
It has changed a lot. In my role at the Bank of Italy the research component was predominant, in my positions at the ECB I have been much closer to monetary policy decision-making: this is the reason that more than any other prompted me to move to Frankfurt. It's a rather natural evolution when you work in central banking.

➜ And today, how would you describe your brief as head of the ECB mission to Greece? The what extent was its content technical, and to what extent political?
Both components were important. The analysis of what is appropriate for the country is important, but then you should also consider the political constraints at national and European levels. It was also necessary to coordinate the work done by the members of my team - a dozen people in Greece - with the teams of other relevant EU institutions: the European Commission, the European Stability Mechanism (ESM), which provides the funds to the state in question, and the International Monetary Fund (IMF). Technically, the European Commission, in liaison with the European Central Bank, conducts the negotiations leading to the drafting of the memorandum of understanding, which becomes the basis for actions of the authorities. The ECB's hand is, of course, most evident in the part of the program that concerns the financial sector. Finally, I wish to point out that the ability to interact productively with national political authorities is the most important element in this line of work.