Fears of an ‘Italexit’ as Italian PM Matteo Renzi resigns after crushing referendum defeat by populists who want country out of the euro
Italy set to become next country to reject the establishment as country votes 'No' to Prime Minister's proposed reforms
THE European Union suffered another blow today after Italy’s pro-EU prime minister resigned following a heavy referendum defeat.
Anti-establishment populist movements are gaining ground in Europe and throughout the world – and the very future of Brussels could now be at stake.
The euro’s value plunged today and experts warned the strife-hit single currency could fall even further because investors are spooked by a long-running banking crisis in Italy and the possibility of elections that could usher in anti-EU parties.
Matteo Renzi stood by his promise to resign after his attempt to change the constitution was overwhelmingly rejected in Sunday’s poll, leading to fears about the future of one of the eurozone’s biggest economies.
“His defeat in the face of populist moves will spawn concerns over the rest of Europe,” said Yunosuke Ikeda, chief currency strategist at Nomura Securities in Tokyo.
Last month Donald Trump won the US election and in June Britain voted to leave the European Union. Both were seen as rejections of the establishment.
Yannick Naud, head of fixed income at Banque Audi (Suisse) SA in Geneva, told Bloomberg News: “There is now a possibility of the euro reaching parity to the dollar. Maybe not right away, but it is a possibility if there is certainty regarding new elections.”
The news sent the euro tumbling to $1.0506 (83p) at one point, its weakest since March last year, before it edged back up slightly. Asian shares also dropped this morning as the political turmoil unfolded.
Italian voters overwhelmingly rejected the proposed reforms the Prime Minister staked his political future on.
Renzi’s defeat and impending departure from the forefront of Italian politics is expected to plunge the nation into a new phase of political uncertainty and economic turmoil.
Speaking at a press conference following the “No” campaign’s victory, Matteo said he takes “full responsibility” for the result.
He said: “My experience of government finishes here.”
He described the “No” campaign’s win as an “extraordinarily clear” victory.
Shortly after acknowledging his defeat, Renzi tweeted: “Thank you to everybody anyway.”
He has confirmed he will resign formally today.
Although exit polls in Italy have been unreliable in the past, those taken on Sunday revealed a huge margin of defeat for the “Yes” side championed by Renzi, who was behind the reforms to streamline the country’s political system.
Polls for national broadcaster Rai and the La7 television channel both called the vote for the “No” camp by a margin of at least 54 per cent to 46 per cent for the “Yes” camp, and by an average of 56.7-43.3 per cent.
The forecasted results were in line with what opinion polls had been indicating up until November 18, after which the media were banned from publishing survey results.
Speaking outside his official residence, Palazzo Chigi, at midnight local time, Renzi announced his resignation.
Now the Prime Minister has stepped down, President Sergio Mattarella will be tasked with the job of brokering the appointment of a new government to steer Italy until the next general election, which must take place by Spring 2018.
WHAT WAS THE POLL FOR?
Matteo's proposals were the most extensive constitutional reform in Italy since the end of the monarchy.
The aim was not only to change the organisation of parliament but also improve the country’s poor governmental stability.
The Italian PM wanted to strengthen the power of central government and weaken the Senate, the upper house of parliament.
However, many claim that the proposed reforms would have given the prime minister too much power – some from within his own party.
But the ‘No’ vote can also be seen as a rejection of the political status quo – much like Brexit and the election of Donald Trump.
The main opposition parties had all gone into the referendum insisting an early election should be called if the proposals to streamline Italy’s parliament were defeated.
Matteo Renzi, 41, assumed office in February 2014, with the goal of reforming Italy’s parliament.
He had also set out to transfer powers from the regions to the national government.
We pay for your stories! Do you have a story for The Sun Online news team? Email us at tips@the-sun.co.uk or call 0207 782 4368.