Italian Premier Mario Draghi  has resigned  after key coalition allies boycotted a confidence vote.

Draghi tendered his resignation to President Sergio Mattarella during meeting at the Quirinale Palace on Thursday.

 Mattarella’s office said the president had “taken note” of the resignation and asked Draghi’s government to remain on in a caretaker fashion.

The President had earlier rejected a similar resignation offer from the Draghi last week.

While the president could see if a new parliamentary majority was possible, his office indicated that he would dissolve the legislature and call early elections.

Draghi’s government imploded Thursday after members of his uneasy coalition of right, left and populists rebuffed his appeal to band back together to finish the legislature’s natural term and ensure implementation of the European Union-funded pandemic recovery program.

Like many countries, Italy is facing soaring prices for everything from food to household utilities as a result of Moscow’s invasion.

 The country is also suffering through a prolonged drought that is threatening crops and struggling to implement its EU-financed pandemic recovery program..

Draghi, a former central banker, was brought in 17 months ago to navigate the economic downturn caused by COVID-19. But his government of national unity imploded Wednesday after members of his uneasy coalition of right, left and populists rebuffed his appeal to band back together to finish the Italian Parliament’s natural term.

Instead, the center-right Forza Italia and League parties and the populist 5-Star Movement boycotted a confidence vote in the Senate, a clear sign they were done with Draghi.

“Thank you for all the work done together in this period”, Draghi told the lower Chamber of Deputies on Thursday morning before going to see Mattarella. 

Dubbed “Super Mario” for helping to lead the eurozone out of its debt crisis when he was head of the European Central Bank, Draghi played a similar calming role in Italy in recent months. His very presence helped reassure financial markets about the debt-laden nation’s public finances, and he managed to keep the country on track with economic reforms that the EU made a condition of its 200 billion-euro (-dollar) pandemic recovery package.

He was a staunch supporter of Ukraine and became a leading voice in Europe’s response to Russia’s invasion, one of the issues that contributed to his downfall since the 5-Stars rankled at Italian military help for Ukraine.

Domestic concerns also played a role. The 5-Stars, the biggest vote-getter in the 2018 national election, chafed for months that their priorities of a basic income and minimum salary, among others, were ignored. 

However, what seemed to be the final straw was a decision to give Rome’s mayor extraordinary powers to manage the capital’s garbage crisis. That which had been denied the party’s Virginia Raggi when she was mayor.

While he could not keep his fractious coalition together, Draghi appeared to still have broad support among the Italian public, many of whom have taken to the streets or signed open letters in recent weeks to plead with him to stay on.

Italian newspapers on Thursday were united in their outrage at the surreal outcome, given the difficult moment that Italy and Europe are navigating.

“Shame”, headlined La Stampa on the front page. “Italy Betrayed,” said La Repubblica.

Nicola Nobile, associate director at Oxford Economics, warned Draghi’s departure and the prospect that the country would not have a fully functioning government for months could exacerbate economic turbulence in Italy, which investors worry is carrying too much debt and which was already looking at a marked slowdown for the second half of the year.

Mattarella had tapped Draghi to pull Italy out of the pandemic last year. But last week, the 5-Stars boycotted a confidence vote tied to a bill aimed at helping Italians endure the cost-of-living crisis, prompting Draghi to offer to resign a first time.

While the next steps were unclear, Mattarella seemed likely to dissolve Parliament after a period of consultations, paving the way for an election as soon as late September or early October. The legislature’s current five-year term  is due to expire in 2023.