How the political crisis in Italy threatens the European currency

In July 2022, a political crisis erupted in Italy. The Five Star Movement party, which is part of the ruling coalition, refused to participate in the vote on a bill to help the population due to inflation, presented by the team of Prime Minister Mario Draghi. He replied that the government could not exist without the party and "there is no other Draghi government but this one." The HEAD of government announced his resignation.

At first, President Sergio Mattarella did not accept Draghi's resignation and invited the prime minister to speak in parliament, where he received a vote of confidence in the Senate on July 20, 2022 with a minimum number of votes (95 against 192). However, this did not save the government from a split, since the three key coalition parties - Five Star Movement, Forward Italy and the League - did not participate in the vote. After that, Draghi announced his resignation for the second time, and the president accepted it.

The political situation in Italy has noticeably alarmed investors. The active purchase of credit default swaps speaks of real concerns about Italy's exit from the EU and the abandonment of the euro.