Italian President rejects Prime Minister Draghi’s resignation

Published on: Amended:

Italian President Sergio Mattarella on Thursday refused to accept Prime Minister Mario Draghi’s resignation, in a political crisis warning experts could send the euro zone’s third-largest economy to a snap election.

Mattarella “did not accept the resignation and invited the prime minister to appear before parliament to make a statement”, the presidential palace said, as Draghi will address parliament next week to see if he has the majority needed to stay.

Italian Prime Minister Mario Draghi announced on Thursday that he would step down after the Five Star Movement, a party in his ruling coalition, failed to back a confidence vote, plunging Italy into political chaos.

“I will submit my resignation to the president of the republic this evening,” Draghi told the cabinet, according to a statement released earlier Thursday by his office.

“The coalition of national unity that supported this government no longer exists,” added Draghi, the former president of the European Central Bank who has been prime minister of a broad coalition since February 2021.

The confidence vote had become a focal point for tensions within Draghi’s government as his parties prepare to do battle in a national election scheduled for early 2023.

The 5-Star party’s decision to boycott Thursday’s vote of confidence sparked the sequence of events that prompted Draghi, 74, to say he would step down.

Draghi had said he would not want to lead a government without 5 stars, which became the largest party in previous elections in 2018 but has since suffered defections and a loss of public support.

President’s role

Italian President Sergio Mattarella, the supreme arbiter of Italian politics, now assumes a central role.

He must decide whether he tries to persuade Draghi to try to form another government, find a new interim leader to take Italy to elections next year, or call a snap election.

Italy has not had an autumn election since World War II, as that is normally when the budget is set and approved by parliament.

The risks of a Draghi government collapsing rippled through financial markets on Thursday where Italian bond yields rose sharply, indicating investors are demanding a higher premium to hold its debt, and stocks fell to lows. levels since the end of 2020.

The turmoil comes at a difficult time for Italy, the euro zone’s third-largest economy, where borrowing costs have risen sharply as the ECB begins to tighten monetary policy.

The ECB is working on a new tool to contain the divergence between German borrowing costs and those of highly indebted member states like Italy.

Draghi, Italy’s sixth prime minister in the past decade, had been seen as reassured that Italy would meet all the conditions attached to the new mechanism, but his departure would create further uncertainty.


Comments are closed.