Matteo Salvini’s right-wing League, Silvio Berlusconi’s Forza Italia and the populist Five Star Movement said they would boycott the vote, saying Draghi had failed to give the Italian public adequate answers to pressing questions. Draghi is expected to resubmit his resignation to President Sergio Mattarella, which could trigger early elections and worsen the political crisis. This followed an earlier resignation offer last week, which was rejected. The collapse of the government followed a vicious parliamentary debate on Wednesday, when Draghi accused members of his coalition of trying to subvert his political agenda even as they claimed allegiance. He had demanded that members of his coalition recommit to his reforms, but his gamble backfired as the three biggest parties rejected his demands. Draghi’s departure will come as Italy faces mounting economic and inflationary pressures stemming from Russia’s invasion of Ukraine. The prospect of prolonged uncertainty could roil financial markets, the EU and the European Central Bank, which is set to begin a tightening cycle on Thursday that will raise Italy’s borrowing costs. It also raises doubts about Italy’s ability to meet conditions set by the EU for the country to receive its 200 billion euro share of the 750 billion euro coronavirus recovery fund. Italy has so far received 46 billion euros with an additional tranche of 21 billion euros expected in the coming weeks. Draghi’s resignation will leave unfinished an agenda of major economic reforms – including overhauling the tax, justice and procurement systems – aimed at making Italy a more attractive place to do business and improving long-term growth. It will now be up to a new government to push through the next phase of reforms to ensure Italy can receive the funds it has been allocated. A former ECB president, Draghi was tapped to form a new government of national unity in February 2021 as Italy bounced back from the pandemic and one of western Europe’s biggest Covid-related economic contractions. Draghi and his team revived the faltering Covid-19 vaccination program and oversaw an economic recovery last year, with gross domestic product growing by 6.6%. But the invasion of Ukraine has put more pressure on the prime minister, given Italy’s historically warm ties with Russia. Draghi took a hard line against the invasion, strongly condemning Moscow for undermining the international order. But his stance, and his promise of military support for Ukraine, has drawn members of his coalition, particularly Five Star, traditionally sympathetic to Moscow.
