Italians rejected the constitutional changes — designed to ease gridlock in the country’s political system — by a wide margin of 59-41 per cent, according to early returns, in a vote marked by a high turnout of nearly 69 per cent.
In an emotional press conference at the Palazzo Chigi early on Monday, Mr Renzi said the outcome had been “extraordinarily clear”.
“We gave Italians a chance to change. It was simple and clear, but we didn’t make it,” he said. Mr Renzi said that he should bear the entire responsibility of the loss, and announced that he would submit his resignation to Italy’s president, Sergio Mattarella, on Monday afternoon.
What happens next
Matteo Renzi will tender his resignation as Italy’s prime minister to the country’s president, Sergio Mattarella, on Monday afternoon after a final Cabinet meeting.
Mr Mattarella will now have to appoint a caretaker government until the next parliamentary elections, due in 2018.
Carlo Padoan, the internationally respected Finance Minister, has been tipped as a candidate to become the next prime minister. Senate leader Pietro Grasso or another minister from the Democratic party could be contenders.
The political instability triggered by Mr Renzi’s defeat could jeopardise plans by Monte dei Paschi di Siena, Italy’s struggling third-largest bank, to raise up to €5bn by the end of the year. The bank and its advisers are expected to meet on Monday morning to decide whether to go ahead with the plan.
The euro suffered a steep fall in the wake of the first exit poll showing a defeat for the ‘Yes’ side, dropping to its lowest level against the dollar since March 2015.
No to constitutional change could mean a set of dominoes could fall...
Prime Minister Matteo Renzi has staked his political future on the outcome of the vote, vowing to resign if his proposals do not win a majority support.
A “No” vote would fuel further instability. If Renzi resigns, President Sergio Mattarella could appoint another prime minister. In that event, any appointee would likely struggle to win parliamentary support, meaning early elections in 2017 could well be called.
Led by comedian Beppe Grillo, the Five Star Movement has vowed that if it wins power it will hold a referendum on whether Italy should leave the eurozone. With Italy housing the eurozone’s third-largest economy, there are fears that the whole currency would then collapse.