Mario Draghi, Italian Prime Minister, Resigns as Coalition Collapses

Rome, Italy

Italian Prime Minister Mario Draghi resigned on Thursday, plunging the European Union’s third-largest economy into fresh political turmoil.

Draghi’s resignation comes after several key parties in his coalition — the powerful Five Star Movement, the largest party in the country’s coalition government, the center-right Forza Italia and the far-right League — boycotted a vote of confidence in the government on Wednesday night.

Now, Italian President Sergio Mattarella will meet Parliament’s speakers, with the next step being a call for early elections – likely to take place as early as the autumn.

The centrist leader’s resignation comes despite his popularity among many in the country and the support of world leaders, who see him as a key European voice in standing up to Russian President Vladimir Putin and his war in Ukraine.

This is why Draghi’s resignation poses a challenge not only to Italy’s future, but also to Europe.

Draghi, a prominent economist with no affiliation with any political party, became prime minister in February 2021, leading a cabinet of ministers from across the country’s political spectrum.

He is the fifth prime minister to lead the country in just eight years, following Giuseppe Conte’s resignation in early 2021 for his handling of the Covid-19 pandemic.

The former chief of the European Central Bank won the nickname “Super Mario” for saving the euro during the European sovereign debt crisis. He worked closely with Finance Minister Daniele Franco to draft a reform plan for Italy that would allow it to receive a €209 billion package from the European Covid-19 recovery fund.

Last week, however, 5-Star withdrew its support in a parliamentary confidence vote on an economic package designed to tackle Italy’s cost of living crisis.

Draghi had previously said he would not lead a government without 5-Star. Meanwhile, the far-right League and center-right Forza parties have rejected the option to remain in government with 5-Star, leaving the government on the brink of collapse and the FTSE MIB, Italy’s main stock market, by more than 2, 5% has fallen. .

With the resignation of Draghi and his government in chaos, Italy will now have to wait for elections to implement any reforms and approve its 2023 budget. The crisis will hit ordinary Italians, because without a functioning government, Italy will not be able to access billions of euros from the EU’s Covid-19 fund.

Italian Prime Minister Mario Draghi will speak in the lower house of parliament on Wednesday ahead of a confidence vote in Rome.

Draghi was a key figure in the West’s response to the Russian war in Ukraine. He was one of the first European leaders to propose sanctions against Russia, including by cracking down on the oligarchs and increasing pressure on the central bank.

He also supported Ukraine’s bid for the EU’s candidacy.

From left: Italian Prime Minister Mario Draghi, German Chancellor Olaf Scholz, Ukrainian President Volodymyr Zelensky, French President Emmanuel Macron and Romanian President Klaus Iohannis meet for a working session in Kiev, June 16, 2022.

Last month he met Ukrainian President Volodymyr Zelensky in Kiev during a visit to underline his support, along with German Chancellor Olaf Scholz, French President Emmanuel Macron and Romanian President Klaus Iohannis, despite growing opposition in Italy over sanctions and aid to Ukraine.

In his final speech before his resignation, Draghi warned the Senate that the turmoil in Italian politics could leave an opening for Russia. “We must block Russian interference in our politics and society,” he said.

Italian Foreign Minister Luigi Di Maio believes Draghi’s political enemies have created an opportunity for Russia, telling Politico last week: “The Russians are now celebrating dropping a new Western government.”

He added: “Now I doubt we can send weapons [to Ukraine]. It is one of many serious problems.”

Rome’s attitude towards Moscow could change after the election, with Putin sympathizers among those vying for power.

Matteo Salvini, the leader of the far-right League party who has made many trips to Moscow, famously posted a selfie of himself wearing a t-shirt decorated with Putin’s face before the invasion from the city’s Red Square. And Putin ally Silvio Berlusconi, who is also in the centre-right coalition, could rattle the Western European alliance.

Draghi’s resignation also comes as Europe faces some of its biggest challenges in years – and is at risk of a recession.

Annual inflation in the European Union rose to 9.6% in June. It reached 8.6% for the 19 countries that use the euro.

And the wildfires that have engulfed Spain and France could also put a brake on economic activity.

As Italians face snap elections, investors fear right-wing factions in the country could gain more support at the ballot box, raising questions about EU cohesion at a key moment.

Italy’s centre-right is led by Eurosceptics, including Salvini of the League and Giorgia Meloni of the Brother of Italy, although some parties in the coalition have taken a softer stance on the EU. And while the Democratic Party is expected to maintain its pro-European stance, it is not expected to rule.

Meanwhile, the five-star movement is made up of both Eurosceptics and EU supporters, but is also not expected to do well in the upcoming elections.

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