Italian politics plunged into months of upheaval
|Italian Prime Minister Mario Draghi asked on Wednesday for the upper house Senate to hold a confidence vote that will effectively decide if his coalition government stays in office. Draghi indicated he was willing to stay on as prime minister if his feuding coalition partners could guarantee “sincere and concrete support” for him to continue.
However, two lawmakers from different parties confirmed to CNBC that Lega, Forza Italia and M5S are to boycott the confidence vote which leaves the government on the cusp of collapse and leading to an early election, regardless that the prime minister won the Senate Confidence motion. Draghi previously said he would not continue without the support of his coalition partner, the Five Star Movement.
This will plunge Italy into months of upheaval and weigh on the euro and Italian and eurozone bonds at a time of soaring inflation and war raging on the euro bloc's doorstep.
This comes ahead of Thursday's European Central Bank meeting while heated inflation risks have already seen money markets punting for a half-point hike. The uncertainty over Italian politics as well as the concerns that Moscow may not resume the flow of gas through the Nord Stream pipe as scheduled, or tightly curbed flows, will indeed be a cloud over the ECB event.
Update
Italy will call for an early election in September.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.