Italian Prime Minister Mario Draghi’s coalition government appeared close to collapse on Thursday after the 5 Star Movement, one of its members, said it would not take part in a parliamentary vote of confidence.

Other coalition parties have warned they will quit government if the 5-star boycotts the Senate vote due later today, while Draghi himself said this week he would not lead an administration without the 5 stars on board.

The 5-star decision plunges Italy into political uncertainty, risks undermining efforts to secure billions of euros in European Union funds and could lead to a snap national election in the fall.

Italy is due to vote by the first half of next year and tensions are rising between members of a coalition that has been in place since early 2021 and straddles both sides of the political divide.

The prospect of a political crisis was felt in financial markets where Italian bond yields rose sharply, indicating that investors are demanding a higher premium to hold its debt, and stocks fell.

After a day of intense discussions within the party, 5-star leader Giuseppe Conte announced on Wednesday evening that he would not support the confidence motion, saying the government should do more to tackle growing social problems in the region. third largest economy in the euro zone.

“I’m very concerned that September will be a time when many families will be faced with the terrible choice of paying their electricity bill or buying food,” he said, referring to sharply rising costs. Energy.

The Prime Minister said on Tuesday that if 5-Star stopped supporting the government, it would be up to President Sergio Mattarella to decide what to do next.

However, Mr Draghi, former president of the European Central Bank, also said he would not be willing to lead a new government without 5 stars in the cabinet.

Two coalition parties, the right-wing League and the centre-left Democratic Party (PD), said on Wednesday that a snap election was the most likely outcome should the government implode.

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The former ECB leader has also been a vocal opponent of Brexit, saying he was “saddened” by Britain’s decision to leave the EU in 2016.

In 2019, while still head of the ECB, Mr Draghi took a thinly veiled jab at Brexit by saying that separation from the EU would deprive businesses and citizens of outgoing member states of the power to shaping the economic order of the world.

He said the EU has given member states the ability “to ensure that globalization is not a race to the bottom when it comes to standards”.

He added: “The EU enables countries to achieve goals that they could not achieve alone.

“And the EU is in turn able to export some of its standards globally.”