Matteo Renzi to resign as Italy faces uncertainty

Whoever is in charge after him probably won’t be able to make any big changes before new elections next year -people are calling the arrangement a “caretaker government”.

There is support for a quick vote to avoid political uncertainty following Sunday’s “No” vote on Mr Renzi’s constitutional reforms. Analysts did, however, expect Mattarella to ask Renzi to stay on long enough to pass the new budget, with a target date of December 23. Mr Renzi will hand in his resignation to President Sergio Mattarella later on Monday, following a final meeting with his cabinet.

Italy’s FTSE MIB stock index tumbled 2.0 percent at the opening before clawing back some ground, underperforming other European markets.

The 41-year-old Renzi, who was appointed to office in 2014, said Monday that he would resign and arranged to meet with the President after close to 60% of voters rejected his proposals.

Italy’s parties now have to work together on the new electoral law, with Five-Star urging a swift deal to open the way for elections in early Y 2017, a year ahead of schedule.

The Senate voted 173-108 to pass the budget law, which was put to a confidence vote to speed up its passage.

Renzi addressed his Democratic Party (PD) before meeting the president, saying the party would only participate in a government meant to last until 2018 if it was backed by all the main forces in parliament, a prospect which seems remote.

As for the adjustment in budget rules, “Yes, indeed, we had some flexible aspects”, she said.

But Fico, as have both other opposition leaders and leaders from Renzi’s Democrats, also cited the need for Parliament to approve a new election law before the national contests are called.

Mattarella can ask someone else to try to form a government and work with the same Parliament, at least for a few months. M5S vehemently opposed the Renzi reforms and wants to take Italy off the euro.

“Renzi addressed his center-left Democratic Party Wednesday evening, giving a speech on his short term as prime minister that marked his government’s achievements”. But, sounding a bullish note, and as if he would possibly seek office again in the future, he asserted that his party would be ready for the elections whenever they are held.

Italian Premier Matteo Renzi, on the verge of resigning, says his Democratic Party doesn’t fear elections if they’re called soon, as some opposition parties demand.

If a new Italian Prime Minister is not installed quickly, then there could be new elections, where the radical Five Star Movement would be the most likely winners.

The law created a run-off system between national candidates that awards the victor a bonus of seats in the Lower House of Parliament. But there has been no such change in the Senate, which is elected by proportional representation.

This required amending an article of the constitution, a move that was rejected by Sunday’s referendum.

French Finance Minister Michel Sapin insisted that the Italian referendum “is a question of internal politics”.

Berlusconi himself was forced to resign in 2011 amid growing Global concern over Italy’s sovereign debt crisis and was replaced by economist Mario Monti, without elections.