February 7, 2023

Italy is poised for snap elections after Prime Minister Mario Draghi resigned today after failing to bring the country’s crumbling coalition parties together.

According to analysts, this move could bring the hard right to power in elections that could be held in September or October.

Draghi, an internationally respected 74-year-old, formally handed over his resignation to President Sergio Mattarella, whose role is now to lead the country out of the crisis.

Italy is set for snap elections after Prime Minister Mario Draghi resigned today after failing to bring the country’s raucous coalition parties together (photo leaves parliament today)

Draghi may remain on as head of government until then.

‘Italy has betrayed,’ shouted the daily front page of the Repubblica, as the Stampa ran ‘For Shame’.

Based on current polls, a right-wing alliance led by Giorgia Meloni’s post-fascist Brothers of Italy party could easily win a quick election.

Draghi, a former head of the European Central Bank, was dropped to the premiership in 2021 as Italy struggled with a pandemic and a distressed economy.

On Wednesday, he had tried to save the government and urged his bickering coalition to put their grievances aside for the sake of the country.

‘Are you ready?’ he asked the Senate four times. This was not the time for uncertainty amid a host of challenges from a struggling economy and rising inflation to the war in Ukraine, he said.

Draghi, an internationally respected 74-year-old, has formally handed over his resignation to President Sergio Mattarella

Three parties – Silvio Berlusconi’s centre-right Forza Italia, Matteo Salvini’s anti-immigrant league and the populist Five Star Movement – decided not to. They chose to hold out the vote, as they could no longer work together.

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

His demise comes despite recent polls suggesting most Italians wanted Draghi to remain at the helm until next May’s scheduled general election.

Concerned investors watched closely as the coalition imploded.

The European Central Bank was set to unveil a tool on Thursday to correct bond market stress for indebted euro-zone members such as Italy.

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

The Milan stock exchange fell 2.0 percent on Thursday’s opening.

Draghi supporters had warned that a government collapse could exacerbate social problems at a time of rampant inflation, slow the budget, threaten the EU’s post-pandemic recovery funds and send twitchy markets into a tailspin. bring.

Draghi’s car arrives at Giustiniani Palace today to meet Senate President Casellati in Rome

Laurence Boone, France’s European Affairs minister, said Draghi’s expected resignation would usher in a “period of uncertainty” and mark the loss of a “pillar of Europe”.

The Brothers of Italy party, which has neo-fascist roots, is high in the polls – but it needs the support of Forza Italia and the League – and the three parties often clash.

Should it win, such a coalition would present “a far more disruptive scenario for Italy and the EU” than Draghi’s government of national unity, wrote Luigi Scazzieri, senior research fellow at the Center for European Reform.

However, research firm Capital Economics said there are “strong fiscal and monetary incentives” for the next government to implement the reforms requested by the European Union, or risk missing out on recovery funds worth billions of euros after the pandemic.

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Brothers of Italy has repeatedly blamed the EU for the problems in Italy.

But Meloni’s support for a “strong and common EU response” to Russian President Vladimir Putin’s war in Ukraine “has already distanced itself from some other right-wing parties in Italy and Europe,” said Holger Schmieding, chief economist at Berenberg Bank.