News

Italian PM Mario Draghi quits after failing to revive his coalition government

Italy’s Prime Minister Mario Draghi
Mondadori Portfolio | Mondadori Portfolio | Getty Images

Italy’s Prime Minister Mario Draghi is expected to resign Thursday, paving the way for fresh elections and opening a new chapter of political uncertainty.

Speaking to Parliament, Draghi said he was going to speak to President Sergio Mattarella and inform him of his intentions after failing to unite his fragile coalition government.

“Thank you for all the work we have done together over this period. After the vote took place last night by the senate of the Republic, I ask to suspend this session because I am on my way to the President of the Republic to communicate my intentions,” Draghi told lawmakers, according to a spokesperson.

It comes after Draghi was snubbed by coalition partners in a vote of confidence in the Senate Wednesday, effectively meaning the government had collapsed.

Despite managing to win the vote, the left-leaning Five Star Movement, one of the parties in the coalition government, said it wouldn’t take part. The ruling Lega party and the Forza Italia party also said they wouldn’t take part.

It paves the way for difficult and uncertain snap elections, which could take place in October.

Last week, Mattarella rejected Draghi’s first resignation and asked him to lead more negotiations with lawmakers in the hope of avoiding snap elections.

That came after the Five Star Movement opposed a new decree aimed at lowering inflation and battling rising energy costs. Italy’s lawmakers held a confidence vote on the wide-ranging policy package, but Five Star boycotted the move, angering both Draghi and the right-wing parties in the coalition.

Draghi, the former European Central Bank chief, was then asked by Mattarella to go back to the upper house of Parliament and hold a vote of confidence in the government itself Wednesday, meaning Italian politics has been in a state of limbo for the last week.

Yields rise

Italian bond yields cooled on Wednesday after Draghi signaled his intention to stay if the coalition government could be salvaged. But as the day progressed, and it became clear that there was still division between the different parties, yields climbed higher — meaning higher borrowing costs for Italy’s government.

Italy, a highly indebted southern European nation, is being closely watched by policymakers in Frankfurt at the European Central Bank, which is on the verge of launching a new tool to help highly indebted euro nations.

The yield on Italy’s 10-year government bond rose to a session high on Wednesday evening at 3.498%. The iShares MSCI Italy ETF, which tracks Italian stocks, slumped 4.8% on the day.

Months of stability

Hundreds of mayors signed an open letter over the weekend asking Draghi to stay. Union leaders and industrialists have also come together to ask Draghi to remain in office. Meanwhile, thousands of citizens have also signed an online petition asking Draghi to stay, according to AP.

Technocrat leader Draghi had brought political stability to Italy for the last 15 months, which has been crucial in receiving pandemic recovery funds amounting to almost 200 billion euros ($205 billion).

His leadership had also been important within the context of Russia’s invasion of Ukraine, with Draghi playing a role in EU sanctions and supporting Italian households dealing with higher consumer prices.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:News