The Empire is about to collapse and Draghi wanted it to be under someone elses watch, the President agrees and deflected it back to Super Mario - you broke it Mario so you pay for it, type of thing

Update (1355ET): Italian President Sergio Mattarella rejected a resignation offer from Prime Minister Mario Draghi, according to a statement from the head of state’s office.

Mattarella invited Draghi to address parliament to assess the political situation after a key coalition party boycotted a confidence vote on Draghi’s government Thursday.

So what happens next? (Via Newsquawk)

One option, short of fresh elections, could be for PM Draghi to ask President Mattarella to allow him to attempt to form a new government without the 5-Star party: as this would allow the 5-Star to stick to its principles without collapsing the government that it retains overall confidence in (opposing just the crisis package), and for Draghi to enhance his credibility within the political sphere.

Such an option is possible as assuming the government ex-M5S remains intact, then they will control 175/321 Senate seats and thus retain a majority

However, this view is muddied by Salvini's League saying they are not willing to remain in the gov’t in the scenario that M5S quits - given they hold 60 seats their loss would erase the gov’ts ex-M5S majority.