Italy’s Prime Minister Matteo Renzi resigns about losing constitutional reform referendum

ITALY’S Prime Minister Matteo Renzi will resign after losing a referendum on constitutional reform in a new blow to the EU.

ITALY’S Prime Minister Matteo Renzi announced early on Monday that he would resign after losing a referendum on constitutional reform.

“My experience of government finishes here,” Renzi told a press conference after the No campaign won what he described as an “extraordinarily clear” victory in the referendum on which he had staked his future.

“I have lost and I say it out loud. My government ends today.

“Good luck to us all,” Renzi told reporters.

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Italy's Prime Minister Matteo Renzi announces his resignation during a press conference at the Palazzo Chigi in Rome. Picture: AFP / Andreas Solaro

‘Good luck to us all,’ declares Italy's Prime Minister Matteo Renzi as he announces his resignation. Picture: AFP / Andreas Solaro

Interior Ministry projections suggested the No camp, led by the populist Five Star Movement, had won the referendum with the backing of 59.5 percent of those who voted.

Nearly 70 percent of Italians entitled to vote on Sunday cast their ballots, an exceptionally high turnout that reflected the high stakes and the intensity of the various issues involved.

Renzi said he would be visiting President Sergio Mattarella on Monday (local time) to hand in his resignation following a final meeting of his cabinet.

Mattarella will then be charged with brokering the appointment of a new government or, if he can’t do that, ordering an early election.

Most analysts see the most likely scenario as being Renzi’s administration being replaced by a caretaker one dominated by his Democratic Party which will carry on until an election due to take place by the spring of 2018.

Finance Minister Pier Carlo Padoan is the favourite to succeed Renzi as the President of the Council of Ministers, as Italy’s premier is formally titled.

Prime Minister Malcolm Turnbull said Renzi’s resignation showed some of the challenges of economic reform.

“The path of reform is challenging,” Mr Turnbull told reporters in Melbourne.

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The referendum was regarded as a barometer of anti-establishment sentiment in Europe.

The vote asked about plans to streamline parliament but it was widely seen as a chance to register discontent with the prime minister.

Populist parties supported a No vote. Opposition leader Matteo Salvini, of the anti-immigrant Northern League, said that if the exit polls were confirmed, the referendum will be a “victory of the people against the strong powers of three-quarters of the world”.

The euro fell against the dollar immediately after the exit polls came out.

There have been growing concerns over financial stability in the eurozone’s third largest economy.

Supporters of the ‘NO’ campaign at the constitutional referendum celebrate near the Palazzo Chigi in Rome which saw the resignation of the countrey’s youngest-ever prime minister Matteo Renzi. Picture: AFP / Filippo Monteforte

There was an immediate reaction from right-wing leaders in Europe.

The leader of Front Nationale in France, Marine Le Pen, tweeted her congratulations to the Northern League.

“The Italians have disavowed the EU and Renzi. We must listen to this thirst for freedom of nations,” she said.

The vote asked about plans to streamline parliament but it was widely seen as a chance to register discontent with the prime minister.

Spearheaded by the populist Five Star Movement, the biggest rival to Renzi’s Democratic party, the “No” campaign has also sought to capitalise on Renzi’s declining popularity, a sluggish economy and the problems caused by tens of thousands of migrants arriving in Italy from Africa.

“God willing it’s over. A new era starts tomorrow I hope,” said Matteo Salvini, leader of the far-right Northern League, after voting in Milan.

Salvini said that if the exit polls were confirmed, the referendum will be a “victory of the people against the strong powers of three-quarters of the world”.

A voter casts his ballot during a referendum on constitutional reforms in Rome. Italians have come out to vote in large numbers. Picture: AFP / Filippo Monteforte

The euro fell against the dollar immediately after the exit polls came out.

There have been growing concerns over financial stability in the eurozone’s third largest economy.

Renzi came to power two years ago aged 39 - the country’s youngest-ever prime minister — on the promise to streamline the country’s political system to help the legislation of policies for economic reform.

Former Italian Premier Silvio Berlusconi casts his ballot in Rome. Picture: AP / Gregorio Borgia

With Renzi’s resignation, some short-term market turbulence looks inevitable. Some analysts fear a deeper crisis of investor confidence that could derail a rescue scheme for Italy’s most indebted banks, triggering a wider financial crisis across the eurozone.

After the Brexit vote and Donald Trump’s victory in the US presidential election, populism has been a factor, and Grillo’s Five Star would see a “No” vote as its stepping stone to government.

But the campaign has also caused many voters to reconsider the merits of a much-loved constitution, crafted in the aftermath of World War II and the bitter experience of fascist dictator Benito Mussolini’s disastrous rule.

Under the proposed reform, the Senate, currently a body of 315 directly-elected and five lifetime politicians, would have only 100 members, mostly nominated by the regions.

The chamber would also be stripped of most of its powers to block and revise legislation, and to unseat governments.

Other envisioned changes involve transferring some regional powers to the national government, making it easier to get major infrastructural works approved, and abolishing a costly policy agency in Rome.