(CN) — Italy veered toward a new political crisis on Thursday that threatens to drag Europe along with it after Italian Prime Minister Mario Draghi's technocratic “unity government” began splintering apart.
Draghi offered his resignation Thursday after senators with the anti-establishment 5-Star Movement said they would boycott a confidence vote for a major aid package to help Italians handle soaring prices.
The 5-Stars' move was seen as a ploy to bolster the party's own sagging political standing as elections loom. But the 5-Stars also were opposed to the inclusion of a giant trash incinerator for Rome in the aid package, a project they have long railed against. Dealing with trash is a major political and environmental problem in Italy.
Despite handing in his resignation, Italian President Sergio Mattarella refused to accept it and told Draghi to try to hold his government together.
Draghi was scheduled to report back to parliament on Wednesday, raising the possibility that he may be able to keep his government intact until regular elections are scheduled next year no later than June 1.
A former head of the European Central Bank who is not affiliated with a party, Draghi was given the reins of Italian politics in February 2021 following a previous political crisis. He was given a mandate to steer the country through the coronavirus pandemic and the economic catastrophe it was causing. Every major Italian party, except the far-right Brothers of Italy, are represented in Draghi's government.
Regardless of Mattarella's attempt to keep Draghi in office, the crisis seems poised to deepen and there is clearly a good chance Italians will be called upon to vote in early elections, perhaps as early as this fall. Italy has never held national elections in the autumn, when the government prepares and passes a new budget.
What happens in Rome, though, has implications that go well beyond Italy.
Italy, the EU's third largest economy, is seen as a volatile member inside the EU because of its enormous public debt, which is a constant threat to the bloc's euro currency, and the rise of far-right political parties.
In the next elections, the League and the Brothers of Italy, two parties with hard-right views, are expected to do very well and potentially lead a new government.
Polls show the Brothers of Italy, with roots in neo-Fascist parties, coming in first with about 23% of the vote. The League, a far-right party long established in regional and national governments, is expected to pull in about 15% of the vote.
But these parties' views on a range of issues are radically different from those propounded by Brussels' bureaucrats and laws. They see immigration as a dire threat, express skepticism about the EU's supranational powers, potentially may favor warming ties with Russia and can oppose tighter environmental regulations.
The crisis dragged down Italian financial markets on Thursday and fears over Italian instability was rocking European markets too. Europe is already facing stiff headwinds and the euro currency has dropped in value and for the first time since 2002 is on parity with the dollar. Euro banknotes began circulating on Jan. 1, 2002, replacing national currencies.
The turmoil in Italy – triggered by a confidence vote over a 26 billion euro ($26 billion) decree meant to help Italians handle soaring costs – reflects political instability brewing in other parts of Europe.
There are fears that the soaring cost of energy and rising inflation, much of it caused by the war in Ukraine, is leading to a season of unrest globally. Some predict this winter to be one of the hardest in decades for Europeans should the cost of heating homes soar along with fuel prices.
Courthouse News reporter Cain Burdeau is based in the European Union.
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