In a speech to parliament, Draghi accused members of his ruling coalition of trying to overturn policies while seemingly professing loyalty. “The only reason I’m here . . . it is because the Italians asked me to stay,” he told the Senate. “But are you ready to rebuild? Are you? This is not an answer you have to give me — but you have to answer the Italian people.’ The expression of his possible willingness to stay in office gave comfort to markets ahead of a crucial meeting of the European Central Bank on Thursday, which is expected to raise interest rates for the first time since 2011. But analysts warned that it was far from certain that Italy’s notoriously militant political parties would back Draghi in confidence votes later on Wednesday and Thursday. “He was very tough. . . he showed no willingness to compromise,” said Roberto D’Alimonte, a political science professor at Luiss University, explaining that Draghi had “created a showdown” with key members of his coalition government. “He said, ‘take it or goodbye,’” he added. Draghi’s stern message appeared hard to digest by key members of the once-unity government: Matteo Salvini’s right-wing League and the populist Five Star Movement, whose members failed to applaud at the end of the speech. Afterwards, Salvini and his centre-right ally, former prime minister Silvio Berlusconi, were due to meet at Berlusconi’s villa to discuss their strategy. The fate of Draghi’s government is being watched closely by Rome’s European allies and rate-setters at the ECB, who fear Italy could plunge the bloc into a period of prolonged political instability at a time when the euro zone risks slipping into recession. because of Russia. gas shortages. Italian bonds rallied in response to Draghi’s comments on Wednesday, narrowing the spread between the rate Rome pays to borrow for 10 years and the German equivalent to just over 2 percentage points. Italy’s borrowing costs had risen sharply in recent days as investors grappled with the potential fallout from Draghi’s departure and the prospect of early elections that could be won by a hard-wing bloc. Draghi, a former ECB president, offered to step down last week after Five Star refused to back him in a crucial parliamentary vote over his irritation over a planned waste incinerator for Rome. President Sergio Mattarella rejected his resignation and instead asked him to return to parliament. Since then, thousands of ordinary Italians, including more than 1,800 mayors, business associations, medical professionals and Rome’s European allies, have publicly appealed to Draghi to stay and help the country overcome the challenges unleashed by the war in Ukraine. However, Draghi’s speech made it clear to the parties that he was not prepared to stay any longer if they stood in the way of key reforms. “What he’s saying to them is, ‘don’t think I’m going to accept your campaign against me or against the government,’” D’Alimonte said. “You have to get in line and stand by me and my policies for the good of the country.” Draghi’s resignation offer was the culmination of growing frustration with the behavior of political parties that were ostensibly part of his government.

The League backed a subversive taxi strike last week against a new competition law that had already been negotiated and must be passed for Italy to receive its next installment of EU coronavirus recovery funds. Salvini and Five Stars are also pushing for higher public spending on welfare measures at a time of intense pressure on public finances. Draghi said such behavior would have to stop — with parties pledging to compromise and undertake tough reforms to stay on a path to fiscal rectitude — if he was to remain in office. “Italy does not need a facade of confidence that evaporates before anti-popular measures,” he said. “We need a new trust pact that must be transparent and specific.” Italians have been disillusioned by the prospect of early elections. A Demos poll last week after Draghi resigned showed 27 percent of Italians wanted elections in the fall, compared with 65 percent who wanted Draghi to stay on until next year. Investors expect the ECB to announce a new bond-buying plan on Thursday to narrow the divergence in national borrowing costs between eurozone countries. This is designed to prevent bond yields from rising from a repeat of the debt crisis that nearly tore apart the eurozone a decade ago. Additional reporting by Martin Arnold in Frankfurt and Harriet Clarfelt in London