The Italian Senate on Tuesday postponed a vote on a no-confidence motion submitted by Lega, postponing snap elections.

The Five Star Movement (MS5), Partito Democratico (PD), the leftwing Free and Equal (LeU), and autonomist parties voted against snap elections. Still, the government has effectively collapsed.

Lega’s leader, Matteo Salvini, has withdrawn the support of his party for the current coalition government. While the vote on a no-confidence motion has been postponed, the prime minister does not command a legislative majority, and the vote cannot be postponed indefinitely.

MS5 wants to avoid elections, which polls suggest would see its electoral influence decrease substantially and is exploring an alternative majority in the current parliament. That is a prospect rejected by the leadership of the main opposition party, Partito Democratico (PD), but considered by a significant minority following former prime minister Matteo Renzi, who wants Italy to approve a new budget before the country goes to the polls. In fact, former culture minister Dario Franceschini and PD member Goffredo Bettini are openly calling for an alternative government with M5S that would implement both electoral reform and the budget.

A vote of confidence cannot be postponed for much longer; Prime Minister Giuseppe Conte will address the upper house over the crisis on August 20. Little can change by this speech alone but there is some time for MS5 to seek the formation of an alternative government.

To expedite elections and derail the possibility of a new government being formed in the current parliament, Salvini is offering MS5 to support an electoral reform bill. Under the proposal put forward by Luigi Di  Maio, the number of legislators from both chambers of parliament would be reduced from 945 to 600, prior to going to the polls.

That is not a simple proposition as it would require redrawing constituency boundaries, rethinking the electoral system and, not least, holding a referendum prior to a general election. That could take months, although Salvini insists the country could be ready to go to the polls by October.

The League’s leader has every reason to want elections to take place as soon as possible, as recent polls suggest that this government’s junior coalition partner is close to achieving a single-party majority, that is, a rare occasion in Italian politics. Salvini insisted on Wednesday that Italy should have fresh elections as soon as possible, arguing that no “strange governments” — PD and MS5 – can be the answer to the current political crisis. “The best way, the most democratic, transparent, direct one, is to have elections,” Salvini told Rtl radio.

Meanwhile, Salvini appears ready to revive his alliance with Silvio Berlusconi’s Forza Italia (FI) party for the next election. FI MPs appear reluctant to seal an agreement to form a single election list but not opposed to a post-electoral partnership. The Brothers of Italy are also eager to join a Salvini government.

In Brussels, the main question at hand is what happens to the mini-BOT monetary policy proposal tabled by the League in the event of a Salvini government. Mini-Bot is the informal name of a parallel currency that Lega would like to bring into circulation in Italy. These mini “bills of treasury” would be small denomination bonds issued by the Italian government to pay off some of its debt to commercial businesses and suppliers and could in turn be used to pay off taxes.

Given that Salvini once described the euro as “a crime against humanity,” markets are also spooked, especially given the prospect of an outright majority for Lega. A number of analysts see this proposal as the first step towards exiting the Monetary Union.

Italy’s sovereign debt amounts to €2.06 trillion or 133% of its GDP. While the majority of that stock is owned by Italians banks, European lenders are also exposed to the tune of €285 bn. The OECD projects Italy’s public debt will rise over the next decade, given a prolonged period of sluggish growth.