Italian Prime Minister resigns, political and economic instability in the country

Italian Prime Minister Mario Draghi has sent his resignation to President Sergio Mattarella due to the ongoing political crisis in the country and losses in the financial markets after the allies rejected the vote of confidence. Foreign news agency “Reuters” reports. According to a statement issued by the office of President Sergio Mattarella, the head of state has accepted the resignation of the prime minister while asking him to remain in office in a caretaker capacity. However, the statement did not say whether What will the president do next, but political sources said that this week he can dissolve the assembly and talk about new elections in October.
Italy’s governing coalition fell apart on Wednesday after the Italian prime minister’s three main allies rejected a confidence vote, in which the prime minister sought to end divisions and renew his controversial coalition. The country’s political stability has been uncertain for several months due to the ongoing political crisis in the country, during which the prime minister helped lead a strong European response to Russia’s invasion of Ukraine, and domestic influence in financial markets. Elsewhere, Italian bonds and stocks sold off sharply on Thursday as markets welcomed the European Central Bank’s first interest rate hike since 2011. In early trade, the benchmark 10-year Italian Bond yields jumped 20 basis points to their highest level in three weeks, while Italian stocks fell 1.8 percent.
Lorenzo Codogno, head of LC Macro Advisors and a former senior official at the Italian finance ministry, said it was a major blow to Italy’s ability to deliver policies and reforms and would lead to delays and disruptions in early elections. And there probably won’t be a budget until the end of the year. The Italian prime minister already resigned last week after he failed to support one of his populist allies, the 5-Star Movement, in a confidence vote on inflation-fighting measures. However, the President rejected his resignation and asked him to go before Parliament to see if he can continue the alliance till the end of Parliament in early 2023. Speaking at St. had called for unity and put before the Senate issues ranging from the problems and hardships caused by the war in Ukraine to social divisions and rising prices. But their ally the Five Star Movement once again said refused to support the Prime Minister that he did not address their major concerns.
On the other hand, the right-wing Forza Italia and League parties have decided to stay out of the election, saying they want the prime minister to form a new administration without 5-Star and with new policy priorities. The conservative bloc, which includes people from the far-right Party of Italy, is said to be likely to win the election.

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