Italian Prime Minister Mario Draghi asked on Wednesday for the upper house Senate to hold a confidence vote that will effectively decide if his coalition government stays in office. Draghi indicated he was willing to stay on as prime minister if his feuding coalition partners could guarantee “sincere and concrete support” for him to continue.

However, two lawmakers from different parties confirmed to CNBC that Lega, Forza Italia and M5S are to boycott the confidence vote which leaves the government on the cusp of collapse and leading to an early election, regardless that the prime minister won the Senate Confidence motion. Draghi previously said he would not continue without the support of coalition partner the Five Star Movement.

This will plunge Italy into months of upheaval and weigh on the euro and Italian and eurozone bonds at a time of soaring inflation and war raging on the euro bloc's doorstep.

This comes ahead of Thursday's European Central Bank meeting while heated inflation risks have already seen money markets punting for a half-point hike. The uncertainty over Italian politics as well as the concerns that Moscow may not resume the flow of gas through the Nord Stream pipe as scheduled, or tightly curbed flows, will indeed be a cloud over the ECB event.