MNI BRIEF: Italy Govt Nears Collapse As Draghi Support Ebbs

Italian Prime Minister Mario Draghi's Unity coalition government looks set to collapse Wednesday, as major parties across the Italian political spectrum have declined, at a late hour, to back him in a crucial confidence vote.

Forza Italia, the League and the 5Star Movement have all said they are not prepared to lend their confidence to the current government. The decision will almost certainly prompt Draghi's resignation, perhaps as soon as this evening, with signs that current a quorum can't be reached to hold a confidence vote in the Senate.

The likely resignation of Draghi, previously the head of the European Central Bank, comes lest than 24 hours before the ECB outlines a tool to deal with market fragmentation of bond spreads, an outcome made more likely by another Italian government collapse. The latest news has seen the euro fall sharply from earlier highs, last trading at EUR1.0170.