Italian Prime Minister Matteo Renzi To Step Down After Referendum Defeat

Prime Minister Matteo Renzi of Italy announced his resignation following the "extraordinarily clear defeat" of his package of constitutional reforms in Sunday's (5 December) referendum, reported The Guardian. Financial markets reacted immediately to the referendum result, as the euro fell sharply in value against the dollar. It continued to fall upon Renzi's announcement, at one stage hitting $1.0507, its lowest since March 2015.

Renzi, who came to power two years ago, intended to reorganise Italy’s political system so he could push through a major economic reform package. He wanted to reduce the number of senators and limit the senate’s power relative to the lower house of parliament. Renzi also wanted to reduce the political power of Italy’s regions. The populist Five Star Movement, led by comedian and Donald Trump admirer Beppe Grillo, backed the no vote, portraying it as a protest vote against Renzi's status quo.

The result means it is likely that new elections will be called, making it conceivable that the Five Star Movement could come to power. The party is currently at around 28 per cent in the polls, slightly behind Renzi’s Democratic Party’s 32 per cent share. When asked if any parallels can be drawn between the referendum and Brexit vote, Five Star's Luigi Di Maio said: “We're not going to leave EU, we're leaving Renzi's era.”