Italy has entered a phase of political turbulence that will slow down the pace of economic reform and raise questions about its financial stability, exposing it to an eventual debt crisis. On July 14, Italian Prime Minister Mario Draghi presented his resignation to President Sergio Mattarella, who rejected it and asked Draghi to stay in power. The prime minister’s move was a reaction to a decision by the populist Five Star Movement party (FSM), earlier that day not to participate in a vote of confidence in Draghi’s government connected to a package of stimulus measures to help Italians cope with the cost of living crisis. While Draghi won the vote thanks to support from other political parties, the FSM’s decision virtually put an end to the national unity government that backed Draghi since February 2021. Draghi is scheduled to speak at the Italian Parliament on July 20, when he could...
