Italian prime minister Matteo Renzi is to resign in the wake of an emphatic loss in Sunday's constitutional reform referendum.
Speaking just 90 minutes after polling stations closed, Mr Renzi said that he had given the referendum campaign his best shot but, given the clear verdict of the electorate, he would be offering his resignation to President Sergio Matarrella on Monday afternoon.
The 41-year-old prime minister suggested there had been several different winners of this vote but only one loser, namely himself.
Projections showed the referendum was on course to lose by a 40-60 per cent margin.
In many parts of the country, Mr Renzi’s loss was as heavy as 30-70per cent, so his resignation long before the electoral count had finished was only to be expected.
It would appear that, for the third time in 2016 following Brexit in the UK and the US residential election triumph of Donald Trump last month, a national electorate has opted to register an emphatic protest vote.
Grim reality
The problem for the prime minister was that the vote became a protest not only against current grim Italian economic reality but also against Mr Renzi himself.
He had not only staked huge political capital in his programme of change but he himself dominated the Yes campaign, in the manner of a US presidential candidate. In his resignation speech, he acknowledged he had completely failed to convince Italians.
Mr Renzi had proposed a package of constitutional changes, including a reduction in the role of Italy’s senate, intended to both streamline and stabilise government and to modernise the Italian executive.
Critics had argued, however, that the major impact of the changes would be to increase the powers of the prime minister rather than to modernise government.
In a press conference late last night, the Five Star Protest Movement M5S, which had urged a No vote, called for an immediate general election.
Arguing that they were willing to introduce changes to the constitution, but not those proposed by Mr Renzi, the M5S said that the electorate had penalised the arrogance of those in power and that the result represented a genuine defence of Italy’s fundamental democratic and constitutional rights.
Unclear scenario
As of now, the immediate scenario is unclear but, given the emphatic nature of Mr Renzi's defeat, Italy seems headed for a sustained moment of political uncertainty.
An early general election, as called for by both the Northern League and the M5S, now seems almost certain.
The scale of the defeat and the immediate resignation of the prime minister look set to unsettle the financial markets.
The immediate focus will be on the Italian banking sector and in particular Monte dei Paschi di Siena, the world's oldest bank, which may now struggle to raise equity as part of a restructuring.
In turn this could put pressure on the Italian government to bail out the bank and lead to wider problems for the Italian financial sector.
With balance sheets weighed down by bad loans, the Italian banking sector looks vulnerable. A key problem for Italy is that the public own €170 billion of bank bonds and might lose some of their money under new EU rules if the State is forced to bail out the banks.
The referendum defeat will also raise fears about wider economic and political upheaval in the euro zone’s third largest economy.
The Five Star Movement has vowed, if in government, to hold a referendum on euro membership.
