Italian PM Draghi Resigns Amid Country's Political Crisis; What Happens Next?

Italian Prime Minister Mario Draghi stepped down from his post on Thursday after one year and a half of his appointment as head of a unity government.

In his resignation letter, the 74-year-old politician told Italian President Sergio Mattarella that he was relinquishing the prime minister position after the three parties in his government refused to support him in a confidence vote, as per a report from BBC.

The influential 5-Star movement, the biggest party in the coalition government of the nation, the center-right Forza Italia, and the far-right League all abstained from a vote of confidence in the government on Wednesday.

The parliament speakers will meet with President Sergio Mattarella, who accepted the resignation, on Thursday afternoon, according to a statement from the presidential palace. The subsequent phase is to announce a snap election.

As the head of the European Central Bank, he earned the nickname "Super Mario" for effectively managing the Eurozone crisis. He was tasked with leading Italy through the COVID-19 pandemic and economic recovery in February of last year, supported by a sizable EU package contingent on significant reforms.

A week ago, Mario Draghi submitted his resignation in response to a political crisis brought on by one of the parties in his coalition government refusing to support his economic plan, per CNN.

President Mattarella asked Draghi to continue, and on Wednesday, he informed the upper house of parliament that he would do so if the political parties were willing to support a strong, stable administration with a "new pact of trust."

Draghi spoke to the lower house of parliament on Thursday morning and received a round of applause before leaving for the presidential palace, the Quirinale. He thanked the MPs for their efforts over the past few months.

After plunging the day before, the Milan stock market fell another 2% on Thursday.

Mattarella: Italian Government Will Continue To Address Crisis

President Mattarella stated that his administration would continue to function to manage current problems, but he did not specify what would come next. The elections set for the first half of 2023 will likely be moved to October.

The far-right League and the center-right Forza Italia are the parties that stand to gain the most from the current political situation, and both ignored Draghi in the crucial vote on Wednesday night.

The far-right Brothers of Italy (FDI) party leads the surveys, its leader Giorgia Meloni is considered a potential prime minister. She has frequently urged for early elections over the past week despite not being a member of the unity government.

A Major Loss for the EU

The main Italian stock market, the FTSEMIB, fell more than 2.5 % on Thursday as a result of the government of the nation is on the verge of crumbling.

The EU lost one of its most seasoned leaders as the former president of the European Central Bank left his post at this crucial time when inflation is skyrocketing and war is breaking out outside its borders.

As tensions grew between Italy's increasingly contentious coalition partners ahead of next year's elections, Wednesday's vote signaled the climax of a crisis that had been building for months, according to Politico.