Final hours for Italy’s Draghi after coalition implodes

Italian Prime Minister Mario Draghi was expected to resign on Thursday after failed efforts to hunt down the country’s recalcitrant parties and launched a snap election campaign before the government was even overthrown.

The 74-year-old told the lower house of parliament he was going into the office of President Sergio Mattarella, whose job it is to accept his resignation sooner and lead the country out of the crisis.

According to political analysts, Mattarella is likely to dissolve parliament and call snap elections for September or October. Until then, Draghi could remain prime minister.

The former European Central Bank chief, who parachuted into the prime minister’s seat in 2021 as Italy grappled with a pandemic and a struggling economy, on Wednesday rebuked his quarreling national unity coalition, urging them to get back in reconcile before it was too late.

“Are you ready?” he asked the Senate four times in a speech followed by feverish party debates. Now is not the time for uncertainty amid a multitude of challenges, from a struggling economy and rising inflation to the war in Ukraine, he said.

Three parties – Silvio Berlusconi’s Forza Italia, Matteo Salvini’s anti-immigrant League and the populist Five Star Movement – opted to sit out the vote, saying it was impossible to regain the confidence lost last week.

The crisis was triggered when the Five Stars rejected a key vote last week, despite warnings from Draghi that it would fatally undermine the coalition.

His likely ouster comes despite polls leading up to Wednesday’s drama suggesting most Italians wanted Draghi to remain in power until the scheduled general election in May next year.

Salvini, who had dinner at Berlusconi’s villa in Rome after the vote, said the election campaign would start on Thursday, party circles told the AGI news agency.

He said Draghi and Italy are “victims of five-star madness”. Five-Star leader Giuseppe Conte responded that the movement, which started as a protest party, “was the target of a political attack. We were forced to the door.”

Enrico Letta, leader of the centre-left Democratic Party, which voted for the prime minister, said toppling the Draghi government meant “going against Italy and Italy’s interests”.

Concerned investors watched closely as the coalition imploded.

The European Central Bank was due on Thursday to unveil a tool to correct stress in bond markets for indebted euro-zone members like Italy.

The spread – the difference between 10-year Italian and German government bonds – widened to 215 points by market close on Wednesday.

The Milan stock market fell 2.0 percent on the opening day.

Draghi supporters had warned that a government collapse at a time of rampant inflation could exacerbate social ills, delay the budget, jeopardize EU post-pandemic recovery funds and send jittery markets into a tailspin.

France’s European Affairs Minister Laurence Boone said Draghi’s expected resignation would herald a “period of uncertainty” and mean the loss of a “pillar of Europe”.

According to recent polls, a right-wing coalition led by Giorgia Meloni’s post-fascist Brothers of Italy party, which includes Forza Italia and the Lega, would easily win a snap election – if the three parties get along.

Such a coalition “would present a much more destructive scenario for Italy and the EU” than Draghi’s national unity government, wrote Luigi Scazzieri, a senior research fellow at the Center for European Reform.