Italy enters into political uncertainty after 5-Stars balk

ROME (AP) — Italy entered into days of political and financial uncertainty Friday as Premier Mario Draghi weighed his options and political leaders considered theirs after coalition ally the 5-Star Movement sparked a crisis by withholding support on a government-sponsored bill.

On the immediate horizon are behind-the-scenes consultations through mid-week to see if Draghi still commands enough support to govern — which the Italian president and key parties clearly want — or preparations for snap elections as early as September.

Milan’s FTSE Mib was trading 1.08% higher Friday though the spread on Italian debt verses the benchmark German bund widened to 220 points, up 1.12% from Thursday’s close.

Draghi immediately offered to resign Thursday after 5-Star senators boycotted the vote, arguing that the conditions that created his government of national unity, which grouped parties on the right, left and the populist 5-Stars, no longer exist. But President Sergio Mattarella rejected his offer and told Draghi to go back to Parliament on Wednesday to see if he still had the support to govern.

The turmoil couldn’t have come at a worse time for the eurozone’s third-largest economy. Italy is facing soaring inflation and energy costs as a result of Russia’s war in Ukraine, a prolonged drought that is threatening crops in the country’s most productive regions and the ongoing implementation of its EU-financed program to recover economically from the coronavirus pandemic.

While Draghi might still have the numbers and the support of key allies to continue leading the government, some on the right are already gunning for an early election since they would stand to do well based on recent local election results and polls.

“With Draghi’s resignation, this legislature is over for the...