Renzi says he will resign with budget’s passage

Italian Prime Minister Matteo Renzi formally handed in his resignation to Mattarella after the country’s 2017 budget was approved in Senate.

Matteo Renzi has formally submitted his resignation, almost three years after he became Italy’s youngest ever prime minister.

Italian Premier Matteo Renzi acknowledged defeat in a constitutional referendum and announced he would resign on Monday.

Prime Minister Matteo Renzi will hand in his resignation to Italy’s president on Wednesday, three days after losing a referendum he had staked his career on.

The resounding defeat was not only seen as a rejection of the reforms, but as a vote of no confidence in Renzi, who said he would step down if the vote went against him. Italians voted “No” by 59.11% to 40.89% on 65.48% turnout.

Before handing back the keys to his Palazzo Chigi residence, Renzi insisted the PD was ready for an early election battle with Five Star, the far-right Northern League and Silvio Berlusconi’s fading Forza Italia.

But a chorus of comments from party chiefs suggests consensus may be growing for an early vote in spring.

In a speech to a meeting of the Democratic Party leadership just before he resigned Wednesday, Renzi took responsibility for his political debacle.

One of the moves that antagonised many in his party was Mr Renzi’s bold manoeuvre to trigger the downfall of his predecessor as premier, Enrico Letta.

On Monday, the day after the referendum, the Eurogroup of euro zone finance ministers said Italy would need “significant additional measures” to rein in its deficit next year, leaving a tough prospect for Renzi’s successor.

The republic’s president has decided and invited the government to remain in charge to deal with general matters. Then, the president said, Renzi could tender his resignation.

Infighting and party maneuverings have dogged the Democratic Party for the last few years. He pledged to resign if the referendum was defeated.

Holger Schmieding, at the Berenberg private bank, said the risk that Italy could choose to leave the euro, while still remote, had increased. Renzi’s squabbling Democrats are the biggest party in the legislature, which could lead the president to tap someone from the Democratic Party fold. Mattarella is now charged with brokering the appointment of a new government, or if that fails, calling early elections.

The constitutional referendum held on Sunday proved a key test for Renzi’s center-left government.

Mattarella will consult with party leaders before naming a new prime minister – the fourth successive head of government to be appointed without an electoral mandate, a fact that underscores the fragility of Italy’s political system. Pillars of the Italian establishment, such as former prime minister Mario Monti, argued against them as well, and for good reason.

Some opposition forces have called for immediate elections, but this option appeared very unlikely.

Grillo has distanced himself from hard right anti-establishment parties in Europe, claiming his Five Star Movement is more interested in ecology and online democracy than xenophobia and nationalism. Otherwise, early elections should be held as soon as possible, he said.