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Draghi Is Signaling That He’s Determined to Quit Government

·2 min read

(Bloomberg) -- Mario Draghi has signaled that he’s determined to resign as Italy’s prime minister next week since he doesn’t have the backing of all the parties in his splintered governing alliance, according to people familiar with the matter.

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Italian President Sergio Mattarella rejected Draghi’s resignation on Thursday, urging him to try to shore up support among his parliamentary allies. Draghi had offered to quit after the second-biggest party in his ruling coalition, Giuseppe Conte’s Five Star Movement, effectively abstained in a confidence vote in the senate.

Draghi isn’t willing to reconsider his decision to leave government and is currently expected to reiterate that position when he addresses lawmakers in Rome on Wednesday, said the people, who asked not to be identified because the conversations were private.

A spokesperson from the prime minister’s office declined to comment.

Five Star leaders are set to meet on Saturday to decide how to move forward in the coming days, according to reports in Italian media.

A resignation by Draghi would throw Italy into turmoil just as Europe is contending with an energy crisis fomented by Russia’s war in Ukraine. And the uncertainty comes at a difficult time for the euro area, with the probability of a recession there growing.

A decision to resign would thwart frantic attempts by Mattarella and other political leaders to avert a government crisis before Draghi’s address on Wednesday. Market reaction to the turmoil has been relatively muted so far as investors seemed convinced that disruptive outcomes such as early elections remain relatively unlikely.

Since he was appointed by Mattarella to guide Italy through the Covid-19 pandemic in early 2021, Draghi has said that he would only remain in office if he had the backing of all the parties in the governing coalition. He reiterated the same line in recent weeks as tensions mounted with Conte, who has been critical of Draghi’s response to the economic crisis and has also opposed Italy’s shipments of weapons to Ukraine.

If Mattarella were to call a new election, the vote would have to happen within 70 days. Based on current polls, a center-right coalition led by Giorgia Meloni’s Brothers of Italy would win if its members stick together. That could involve a tie-up with the League, led by Matteo Salvini, who has threatened to ditch Draghi’s coalition. But the political landscape is in flux and it’s possible that no single group would have a majority.

Even though Conte triggered the current situation, he’ll have to decide whether it’s in his party’s interest to have an early ballot -- Five Star’s popularity has plummeted since it entered government and it would likely lose seats.

(Updates with Five Star meeting in the fifth paragraph)

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