Home WORLD EUROPA Italy: Prime Minister Mario Draghi resigns for the second time

Italy: Prime Minister Mario Draghi resigns for the second time

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The Presidency of the Italian Republic said in a statement that Sergio Mattarella had took note of this resignation and had appointed Mario Draghi to continue to manage day-to-day business.

This statement did not specify the intentions of the Head of State, but he should probably dissolve Parliament and call early elections in the fall, according to political sources interviewed before the formalization of the resignation of Mario Draghi .

Sergio Mattarella is to meet with the presidents of the two chambers of the Italian Parliament on Thursday afternoon.

Italy’s governing coalition collapsed on Wednesday after three partner formations decided not to take part in the vote of confidence that Mario Draghi had requested in the hope of ending divisions and reviving their alliance.

The new political crisis in germ puts an end to a period of relative stability in Italy. In power since February 2021, Mario Draghi has notably contributed to defining the European Union’s firm response to Russia’s offensive in Ukraine and has restored the country’s image in the eyes of the financial markets.

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Hard blow

The announcement of his resignation shook Italian bond and equity markets, hours before the European Central Bank (ECB) proceeds with its first rate hike since 2011 in order to combat record inflation.

By mid-morning, the yield on 10-year Italian sovereign bonds gained more than 20 basis points, to a peak since June 28, while the Milan Stock Exchange lost around 2%.

This is a big blow to Italy’s ability to implement short-term policies and reformssaid Lorenzo Codogno, manager at LC Macro Advisers.

While the former President of the European Central Bank won the confidence of the Senate on Wednesday, three parties in his government coalition abstained, dampening hopes of avoiding early elections in a troubled international and economic context, especially as the current legislature is due to end in the first half of 2023.

The conservative parties Forza Italia and the League as well as the 5-Star Movement (M5S) did not take part in the vote, a week after a comparable boycott of the party anti-system M5Swhich had prompted Mario Draghi to present his resignation for the first time – then refused by the President of the Republic, Sergio Mattarella.

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According to the polls, the conservative bloc is the favorite for the early elections, with an expected advance from the far-right Brothers of Italy party – the only major party that had refused to join the coalition.

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