Italy political turmoil: PM Draghi's resignation triggers snap elections

On Thursday, Italy's warring parties toppled reformer Prime Minister Mario Draghi. This led to President Sergio Mattarella dissolving the parliament and triggering early elections. As per an AFP report citing government sources, the elections will take place on September 25, and Draghi will stay on as the head of government till then. Mattarella stated that while dissolving the legislature was typically the last choice, in this instance the conflict among the parties that Draghi's national unity cabinet had been comprised rendered it "inevitable". However, he noted that Italy was dealing with significant issues that couldn't be pushed off while the parties ran their campaigns.

He said that there could be no "pauses in the essential interventions to combat the effects of the economic and social crisis and in particular the rise in inflation".

Draghi made an effort to save the government by pleading with his divided coalition to set aside their differences for the good of the nation. However, three parties—the populist Five Star Movement, the anti-immigrant League of Matteo Salvini, and Silvio Berlusconi's centre-right Forza Italia—said that cooperation was no longer viable.

Following Draghi's resignation, the spread, or the difference between Italian and German 10-year government bonds, increased to a high of 241 basis points, and Milan's stock market fell 2.0 per cent at the opening on Thursday.

Draghi's supporters have also warned that a collapse of the government can deepen social problems during a time of high inflation, delay the budget, and jeopardise EU post-pandemic recovery money while sending nervous markets into a tailspin.

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