Italy’s PM Matteo Renzi to resign after constitutional referendum defeat

Italian voters rejected a constitutional reform plan, according to exit polls which showed that the “No” campaign had prevailed following Sunday’s referendum.

Crucially, reports say Mattarella shares that view.

“Tomorrow the President of the Republic will have a meeting with me and I will hand in my resignation”, Renzi said.

But Mattarella told him to stay in office until passage of the budget law, which was done Wednesday afternoon.

President Sergio Mattarella asked Renzi Wednesday evening to stay on in a caretaker role until a new government can be put in place.

“The reading was very strong even without large-scale orders and that suggests it’s more than just a flash in the pan”, BayernLB economist Stefan Kipar said, noting that some firms might have brought orders forward.

Angling to gain national power for the first time are the 5-Stars, who did well in mayoral races earlier this year, including winning City Hall in Rome, Italy’s capital.

Significantly, Alfano said he made his forecast after discussing the issue with Renzi.

Meanwhile financial markets have stabilised after initial falls on news of Mr Renzi’s defeat.

“The referendum was a question on domestic Italian politics…”

On Friday, the Labor Department said USA employers added 178,000 workers last month, as the unemployment rate fell to a nine-year low.

“(There is) the rising risk that the stabilisation and reduction in Italy’s large debt burden will be further deferred”, the ratings agency warned. Ulrich Grillo said that the Italian state and economy need to be modernized to create jobs. Still, he hinted at worries that Italy’s Monte dei Paschi de Siena bank was one step closer to possible failure in the wake of Renzi’s resignation.

So far markets have taken Italy’s political turmoil in their stride.

Italy is a major trading partner for Germany, Europe’s biggest economy.

Renzi had strongly advocated the reform, claiming it would help streamline Italy’s laborious law-making process and increase political stability.

He said Democrats “have no fear of anything or anybody if the others want” elections soon.

Northern League leader Matteo Salvini called for an immediate election this winter “because real change happens only through electoral victory”. “I think this is really a breakup of the European Union, not that the European Union itself is going to go completely away, but it’s the end of that vision that started at the end of the Second World War that Europe was going to unite”.

Nevertheless, investors are bracing for more volatility over the coming weeks as a replacement for Mr Renzi is chosen and the fate of key Italian banks is decided. “They will make the best of it”. I am Italian and I love my country.

He told reporters in Brussels that “it doesn’t really change the situation economically in Italy or in the Italian banks”. “If this is the market reaction, it doesn’t seem to require any emergency steps”.

The centre-left Democratic Party, or PD, has been left most battered by Renzi’s resignation as prime minister following the defeat of his constitutional reforms.

But Renzi was also accused of running a populist campaign, touting the reforms as a way to have “less politicians”.

S&P, which rates Italy at BBB-, said the proposed reform would have had potentially positive benefits.