Italy voter turnout above 20 percent at midday

The euro sank to 20-months lows in Asia on Monday after Italian Prime Minister Matteo Renzi said he would resign in the wake of a stinging defeat on constitutional reform that could destabilize the country’s shaky banking system.

“Buy bonds and sell stocks”, hedge fund investor Douglas Kass, who runs Seabreeze Partners Management Inc, said after the vote.

“A new political storm. could unleash financial market volatility at a time when Italian banks need to raise capital to cover losses from fresh write downs and planned bad debt disposals”, wrote Raj Badiani, senior Italian economist at IHS Insight in a note on Saturday.

Renzi has vowed to resign if the referendum isn’t passed, and for many Italians the ballot has become something of a vote of confidence in the leader.

Austria, one of the most peaceful countries in the world will also test the rise of populism that led Donald Trump’s presidential election win and Britons vote to leave the EU.

Italian Prime Minister Matteo Renzi says he takes full responsibility for the crushing defeat at the referendum he proposed, which would have reduced the powers of the Senate. The “Yes” vote would be between 42 percent and 46 percent.

If Italy votes No, it would follow the UK’s vote in June to leave the European Union, as well as the rise of the anti-immigrant Front National in France and populist parties elsewhere (along with Donald Trump’s unexpected win in the United States presidential election).

Sunday’s referendum, created to hasten the legislative process by reducing the powers of the Senate and regional authorities, was to have been his crowning achievement.

Initial exit polls varied by source late on Sunday, but all had the constitutional reforms proposed by Renzi poised for crushing defeat. But his decision to tie the outcome to this political future transformed the vote into a plebiscite on his leadership. The Guardian newspaper noted that the referendum was among a series of votes in Europe that could “conceivably herald the end of the European project in its current form”. His opponents were hoping to tap into the populist sentiment that has been gaining ground in Europe and the U.S.

“Renzi was wrong from the start to personalise the vote by saying he would quit if the No camp wins”, said young voter Elena Piccolo, a student in Naples.

Italians living overseas had voted by post over recent days and the ballots were flown to a hangar on the outskirts of Rome.

A turnout above 60 percent could also make the result more unpredictable, as it would suggest many voters who said they planned to abstain ended up going to the polls.

In addition, his opposition came from all sides: former Prime Minister Silvio Berlusconi’s right-leaning Forza Italia Party, populists Lega Nord and the 5-Star Movement (M5S), and even some members of his own PD were against the move.

If voters reject the referendum, Renzi was expected to offer his resignation right away.

Polls opened at 7am local time (6am GMT), with 51 million Italians eligible to vote.

Renzi said the reforms would have cut Italy’s bureaucracy and made the country more competitive.