After a political party in his ruling coalition in Rome refused to participate in a confidence vote, Mario Draghi decided to resign as Italian prime minister.
Italian politics were thrown into a fragile state of affairs after the president of the republic told the cabinet that he would resign tonight.
He said that the national unity coalition did not exist anymore.
A new decree aimed at lowering inflation and battling rising energy costs was opposed by the Five Star movement. Analysts argue that the opposition to the policy package is due to internal party disputes.
The wide-ranging policy package was the subject of a confidence vote. The vote was boycotted by Five Star despite Draghi threatening to step down if the party didn't support it.
Wolfango Piccoli, co-president of the consulting firm Teneo, said in a note Thursday that the move by the M5S was largely triggered by turmoil within the ailing party.
The government formed by several parties and technocrats has the aim of bringing stability to the southern European nation, which is often thrown into new political chaos.
The stability of Italy's economy has been made easier by the work of Draghi, who has pushed for a reformist agenda. Efforts to secure post-pandemic funds from the EU are at risk because of this new setbacks.
Italy is due to have new parliamentary elections in June of 2023, but the current uncertainty in Rome could cause that to happen earlier.
Despite having a majority in the Italian Parliament without the support of the Five Star Movement, Draghi has previously said he wouldn't be able to lead another executive.
Banking stocks took a tumble as Italy's FTSE MIB shed 3.3% by the market close, with Italian bond yields pushing higher.
All Rights Reserved © 2024
