What We're Watching: Draghi's departure, Russian annexation plans, two-way race for British PM

Draghi throws in the towel

Italy's embattled Prime Minister Mario Draghi finally stepped down on Thursday for a second time in a week, hours after winning a vote of confidence in the upper house of parliament on Wednesday evening. This time, President Sergio Mattarella didn't reject his resignation but asked him to continue as caretaker PM, presumably until a fresh election is held.

The vote of confidence was partly hijacked by mass abstentions from three of the top parties in his coalition: the populist 5-Star Movement, the far-right Lega, and the center-right Forza Italia. The no-shows broke Draghi’s hopes of keeping together a strong majority, and in the end he kept his promise to stay on as PM only if he held the coalition together. That was impossible since both Lega and Forza Italia wanted to ditch 5-Star, which they blame for the government’s collapse after rejecting Draghi's energy crisis relief plan.

The PM's departure puts an end to 18 months of a fragile unity coalition government, and ushers in a period of deep uncertainty for Italy and Europe at a critical time. Inflation and energy costs are both surging, and Draghi didn't have time to pass the reforms necessary to unlock EU pandemic relief funds. Also, the next government might be led by the Euroskeptic far-right party Brothers of Italy, out of the coalition and whose leader Giorgia Meloni celebrated the exit of "Super Mario".

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Russia wants more of Ukraine

The US has feared for months that Russia aimed to annex Ukraine’s eastern Donbas region. But having already seized much of the Donbas, Russian Foreign Minister Sergei Lavrov said Wednesday that Moscow also intends to gobble up the Kherson and Zaporizhzhia provinces in southern Ukraine, along with a “number of other territories.” American officials now believe Russia plans to illegally swipe sovereign parts of Ukrainian territory by introducing the ruble and forcing residents to get Russian passports — a new twist on Vladimir Putin’s 2014 playbook in Crimea, where the Kremlin held a bogus referendum on "joining Russia” prior to annexation. Since peace talks with Kyiv collapsed this spring, Putin likely thinks the odds of a negotiated settlement are slim, so he might as well take as much of Ukraine as he can before the Ukrainians get enough Western weapons to mount a counteroffensive. That would allow Putin to link Crimea by land to the Russian mainland and could boost his popularity at home. But there's a big downside: he’ll need to spend lots of troops and rubles on pacifying hostile populations and propping up battered economies.

UK race narrows to two: Sunak vs. Truss

Conservative MPs voted on Wednesday to advance Rishi Sunak and Liz Truss to the final round of balloting for leadership of their party. Starting Friday, about 160,000 party members nationwide will begin voting by mail to decide which of these two will serve as the UK’s next prime minister, at least until the next national election. The result of the vote won’t be known until Sept. 5. Sunak is best known for serving as chancellor during the pandemic and directing heavy spending to boost the UK’s flagging economy. Though fined for involvement in outgoing PM Boris Johnson’s lockdown scandals, Sunak was among the first to signal his lack of confidence in Johnson by resigning. Truss has served as both post-Brexit international trade secretary and foreign minister. So far, the candidates have competed for votes among their fellow MPs. Now they must win the hearts and minds of their party’s rank-and-file. A YouGov poll of party members this week showed support favoring Truss, 54% to 35%. But it’s all to play for as weeks of hustings kick off across the UK after Monday’s televised debate between the finalists. The new prime minister will then have to persuade the rest of the country that Tories aren’t just listening to other Tories.