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  • By The Financial District

Draghi Quits Italian Premiership After 5-Star Partner Mutiny

The coalition government of Italian Prime Minister Mario Draghi was in danger of collapsing on Thursday, July 14, 2022, after one of its members, the 5-Star Movement, declined to approve a parliamentary vote of confidence that included measures to combat the cost of living crisis, Giuseppe Fonte and Angelo Amante reported for Reuters.

Photo Insert: The prospects of a Draghi government collapsing sent shockwaves through the financial markets.

Immediately following the vote, Draghi traveled to the Quirinale Palace in Rome to meet President Sergio Mattarella, the ultimate political arbiter in Italian politics. The two men spoke for about an hour. The 74-year-old Draghi returned to his office without commenting on the discussion.

Livia Borghese and Sharon Braithwaite reported for CNN early on July 15, 2022 that Draghi stated he will retire as Italy's prime minister despite winning the vote with 172 in favor and 39 opposed, despite the 5-Star boycott.

The vote of confidence had become a focal point for tensions within Draghi's broad coalition, whose parties were preparing to compete in a national election scheduled for early 2023.

The prospects of a Draghi government collapsing sent shockwaves through the financial markets, as Italian bond yields jumped substantially, suggesting that investors demanded a larger premium to hold its debt, and where share prices dropped to their lowest levels since late 2020.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

The instability comes at a difficult moment for Italy, the third largest economy in the eurozone, where borrowing prices have soared as the ECB begins to tighten monetary policy.

Draghi elevated the stakes by stating he would not want to lead a government without 5-Star, which emerged as the largest party in the 2018 election but has since lost popular support due to defections.

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