Italian Premier Mario Draghi threatens to resign, fears of instability for Europe

Italian Premier Mario Draghi has told his Cabinet he will offer his resignation to the president, following the refusal of a coalition ally to support a government bill.

"The majority of national unity that has sustained this government from its creation doesn't exist anymore," Draghi said in a statement released by his office.

It will be up to President Sergio Mattarella to accept or reject the resignation. But if the government crisis can't be resolved quickly, Mattarella could pull the plug on Parliament, setting the stage for an election as early as September.

Draghi earlier won a confidence vote in the Senate but the future of his pandemic unity government was in doubt after the populist 5-Star Movement boycotted the vote, throwing his coalition into crisis.

5 stars Movement lawmaker Maria Domenica Castellone reacts at the end of a speech at the Senate. Photo / Gregorio Borgia, AP

The vote was 172-39 on a relief bill to help Italians facing soaring energy costs, but 5-Stars senators were absent after confirming they wouldn't participate.

Draghi met later Thursday with President Sergio Mattarella to decide on the next steps, resulting in the offer to resign.

Draghi has repeatedly made it clear that the populists were among the coalition partners that signed up to be part of his government last year and that he wouldn't continue without them.

Mattarella could accept or reject any resignation by Draghi. The president could also ask Draghi to go before Parliament in the coming days to seek a formal vote on the government itself, to see if the ranks of squabbling allies would rally around him.

Parliament's term expires in spring 2023. If Mattarella can't come up with a solution so Draghi's government can continue, he is expected to dissolve the legislature and call an early election, which could come as early as late September.

Politician Matteo Renzi speaks at the Senate, in Rome. Photo / Gregorio Borgia, AP

Mattarella had tapped the former European Central Bank chief — who was known as "Super Mario" for his "whatever it takes" rescue of the euro — to pull Italy out of the coronavirus pandemic and lay the groundwork to make use of billions in European Union pandemic recovery funds.

The 5-Stars had joined Draghi's broad coalition of national unity, which included parties both on the right and the left.

But the 5-Stars, which have lost significant support in recent years, have been complaining that their interests have been ignored. In the measure voted on Thursday, the 5-Stars opposed a provision to allow Rome to operate a garbage incinerator on the outskirts of the chronically trash-choked Italian capital.

That item was just part of a bill that reduces taxes on gasoline and diesel fuel, as well as extends utility bill relief to hard-pressed Italians, but 5-Star leader Giuseppe Conte cited the provision in announcing late Wednesday that his lawmakers would boycott the vote.

In the debate Thursday, several senators blasted Conte's decision.

Being in a government "is not like picking up a menu and deciding, antipasto, no, gelato, yes", said Emma Bonino, who leads a tiny pro-Europe party.

Others noted that Draghi had increasingly become a pivotal figure in Europe as Russia wages war against Ukraine, especially with the impending departure of British Prime Minister Boris Johnson.

An ally of centre-right leader Silvio Berlusconi, the former Italian premier, argued in the Senate that a collapse of Draghi's government could trigger "the destabilisation of Europe".

"You'd be doing a favour to [Russian President Vladimir] Putin," thundered Sen. Antonio Saccone.

Senators stand in the Senate before voting on a bill of economic measures. Photo / Gregorio Borgia, AP

Draghi has governed with the support of virtually all of Italy's main parties, with the exception of the fast-rising far-right Brothers of Italy party, which has demanded that Mattarella pull the plug on Parliament and give Italians a chance at voting in new leaders.

But Giovanni Orsina, a history professor and director of the school of government at Rome's LUISS university, said Mattarella would want to avoid calling an early election and will likely ask Draghi to go to Parliament to see if he can command a new, workable majority.

"We've got the pandemic, we got the war, we have inflation, we have the energy crisis. So certainly this is not a good moment," Orsina said. "And also because Mattarella believes, rightly, that his mission is to safeguard stability."

Among Draghi's achievements has been keeping Italy on track with reforms that the EU has made a condition for the country to receive €200 billion in pandemic recovery assistance. Much of that EU funding is already allocated and subject to automatic mechanisms, suggesting the funding won't be lost, even amid government instability.

"But of course the fact that Draghi with his prestige, international prestige, is not behind that, is going to have some kind consequences," Orsina said.