The downfall was formally brought about by former Prime Minister Giuseppe Conte – whose personal grudge against Prime Minister Mario Draghi prevailed over his political judgement – and his rump Five Star movement. It was, however, engineered by Matteo Salvini’s Lega Nord party with support from Giorgia Meloni’s far right Brothers of Italy group. A crucial role was played – behind the scenes – by former Prime Minister Silvio Berlusconi, who once more confounded those who thought his decline irreversible to emerge as the mediating point in a deeply divided centre-right coalition.
ECB President Christine Lagarde said a clear deterioration of the inflation outlook and unanimous backing for the anti-fragmentation instrument justified the bigger move.
Unveiled alongside its first interest rate hike in 11 years, under the Transmission Protection Instrument (TPI) (the new backstop), the ECB will buy bonds from countries whose borrowing costs relative to Germany it sees as soaring through no fault of their own.
Sources told Reuters after the ECB’s announcement that all euro zone countries were eligible based on the conditions.
But Christiansen noted that may not be the case in the future, depending on what a new Italian government looks like.