European Union leaders urge for calm after Renzi’s loss in Italy referendum

Italian Prime Minister Matteo Renzi speaks at a news conference at Palazzo Chigi in Rome on December 4.

The unexpectedly large margin of defeat with a robust voter turnout of 68.5% appeared to rule out any chance that Renzi would be offered another shot at forming a government.

Italy’s banking sector drove the FTSE MIB index down by over 1.3 per cent, with Banco Popolare di Milano and Banco Popolare both falling by more than seven per cent in the day.

“The Democratic Party wants him to continue with his task”, Ettore Rosato, head of its lawmakers in the lower house, a Renzi loyalist, insisted on Monday evening. “But I won’t blame them because when you are the prime minister of the most handsome country in the world, you have no right to sulk”.

Britain will “work closely” with the new administration in Italy which emerges after the resignation of Prime Minister Matteo Renzi in the wake of his referendum defeat, Downing Street has said.

President Mattarella said the Prime Minister could resign after the budget is agreed.

“A lot of people who said they were going to abstain ended up voting, and almost all of them voted against Renzi”, Benini said, adding that some Italians also did not reveal their true intentions to pollsters.

The mainstream parties have already said they plan to change the electoral law, and whichever system is adopted is likely to make it much harder for 5-Star, a political outsider that rejects any alliances with its “establishment” rivals.

Grillo said a snap election should be held on the basis of a recently adopted electoral law created to ensure the leading party has a majority in the Chamber of Deputies, despite having previously called for this to be changed. Daisuke says elections in Netherlands, France, Germany and Italy next year keep euro pressured.

In one fell swoop, it adds another country to the list of European Union members that are likely to be pre-occupied by domestic politics in 2017, a year in which the Dutch, French, Germans, and possibly the British, will go to the polls.

“We leave with no regrets”, Renzi said.

Number 10 stressed that the outcome of the referendum on proposed constitutional changes was “a decision for the Italian people”.

Italian Economy Minister Pier Carlo Padoan, who has pulled out of scheduled meetings with European finance ministers in Brussels this week, is viewed as a possible candidate to replace Renzi.

Mattarella could ask Renzi to remain as a caretaker prime minister, or he could name another interim leader, who would need to be approved by Parliament.

Calling on his blog for immediate elections, Five Star founder Beppe Grillo wrote, “From next week, we will start to vote for our government policies on-line and for our government team”.

AMP Capital chief economist Shane Oliver, however, noted that Mr Renzi’s resignation does not guarantee a victory for 5SM, adding that an election is itself unlikely to be held before its due date in 2018.