Italian Prime Minister PM Renzi to resign Friday

While Italy’s opposition parties were united in antipathy for Mr Renzi’s policies and reform course, they have little else in common and have already begun vying to position themselves for eventual campaigning for Parliament.

Mr Renzi had meant to stand down from office immediately after his defeat on Sunday, but agreed to delay his resignation after a personal plea from Italian President Sergio Mattarella. Some officials say Parliament could pass that law as soon as the end of the week.

The overall “No” vote led “Yes” by nearly 20 points, pushing Mr Renzi to announce his resignation only one hour after polls had closed, with counting still under way.

The 41-year old former mayor of Florence told the country after his defeat: “My experience of government finishes here”.

There was concern that markets could be spooked by Italy’s vote, seen as a victory by anti-establishment populists in the mould of Britain’s Brexit referendum and Donald Trump’s win in the USA presidential elections.

“1,000 hard but wonderful days. Thanks to everyone. Viva l’Italia”, he wrote on Facebook.

Renzi saw Mattarella twice during the day, and after the first meeting the president called for “calm” and, in a likely reference to the budgetary issue, said institutions have “in any case to meet commitments and deadlines”.

Initial market reaction was subdued.

Uncertainty surrounding Italy’s future briefly sent the euro to its lowest level in 20 months, with the EUR/USD finding a bottom near 1.0500.

But, his reforms made little impact, and the Five-Star Movement claimed the anti-establishment banner, tapping into a populist mood that saw Britons vote to leave the European Union and Americans elect Donald Trump it President. “It seems to ne now that there isn’t a financial crisis coming from the referendum in Italy”, he said. Such a referendum would destabilise Italy’s fragile economy and, particularly, the country’s banks.

Demands mounted from opposition parties, eager to capitalise on Mr Renzi’s political misfortunes, for elections to be called far ahead of the spring 2018 due date.

Elections will not be held until after that ruling, because Mattarella has made it very clear he is disinclined to dissolve the parliament until both houses have compatible electoral laws.

Observers varied widely in their interpretation of the vote.

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

The anti-EU, anti-migrant Northern League leader Matteo Salvini’s campaign against the referendum also focused on the overseas vote, as he seeks to expand his party’s influence beyond its traditional northern base, including a trip to Moscow. “Italy is now entering into troubled waters”, Giovanni Orsina, political science professor at the Luiss University in Rome, told AFP.

“The vote has broad similarities with the Brexit and Trump phenomena”, he said. “They didn’t get into the subtleties”.

Others, no doubt, wished to register their anger at Italy’s glacial economic growth and high unemployment rate. Elections under two different systems would be a recipe for political paralysis, most observers agree.

“The Democratic party is not afraid of votes”, he said.