Italy’s Prime Minister Giuseppe Conte has handed in his resignation.
The EUR/USD is trading around 1.1100 as the Italian President Mattarella explores the next steps for the government.
Giuseppe Conte was the head of Italy’s coalition government between the anti-establishment Five Star Movement and Matteo Salvini’s far-right League.
His resignation comes after a government crisis was triggered at the start of the month – on 8 August, Matteo Salvini retracted his support from the government alliance.
Salvini proposed a no-confidence motion, insisting he could no longer work with the Five Star Movement.
Sergio Mattarella, Italian President, accepted Giuseppe Conte’s resignation.
Earlier in May, Matteo Salvini’s League outright won the 2019 EU elections in Italy. The League was particularly popular in the north, with support strengthened in that area due to its original ideologies, whilst the Five Star Movement was strong in the south.
The League won 34.3% of the vote, whilst the Five Star Movement came third after the Democratic Party at 17.1%.
Matteo Salvini’s League, with a particularly hard stance against immigration, was originally called the North League and was against the south of the country.
Almost a year ago, Italy’s coalition launched a calculated chess game against Brussels over the nation’s budget.
The coalition government set a budget deficit equalling 2.4% of Italian GDP, a figure well above the country’s Finance Minister’s recommendation of 1.6%.
Though the figure was below the EU’s deficit limit of 3%, it remained far too high for a country whose debt is as big as Italy’s.
As political uncertainty looms over Italy, the nation braces itself for the next step following Giuseppe Conte’s resignation.