Italian Prime Minister Matteo Renzi resigns

Calls mounted rapidly Monday from populist and other opposition leaders for quick elections in Italy, seeking to capitalize on Premier Matteo Renzi’s humiliating defeat in a referendum on government-championed reforms.

Renzi had pledged to quit as head of the Italy’s almost 3-year-old center-left government since voters in a referendum ballot on Sunday rejected a series of constitutional reforms he had championed.

Renzi tried to resign on Monday, but President Sergio Mattarella told him to stay on until Parliament gave final approval to the 2017 national budget legislation.

Italy’s lower house has already approved the plan, meaning only a vote of the Senate is needed for the budget to pass. “Formal resignation at 7 p.m. Thanks to everyone and long live Italy”, Renzi said on Twitter.

Initial market reaction to Renzi’s departure has been subdued.

Grillo and his supporters want to hold a referendum on Italy’s European Union membership if elected. Indeed, the DAX shot higher in the immediate aftermath of the Italian “No” vote widening the gap to the Italian index.

Asian stocks rallied Tuesday after the previous day’s losses fuelled by Italian uncertainty.

According to the country’s Interior Ministry, 59.11 percent of voters opposed Renzi’s proposals, while 40.89 percent supported the reforms.

Some analysts said the referendum could come to be seen as a landmark moment.

Luigi Scazzieri of the Center for European Reform says there is hope that investors will not be put off. But Italy is still the eurozone’s third largest economy. “My government ends here today”, Renzi said Sunday.

The euro eased 0.1 percent to US$1.0751, but held onto the bulk of the gains from Monday, when it ended up gaining about 1 percent, bouncing from a low of US$1.0505 after Renzi said he would resign. Italy is now waiting for the President of the Republic Mattarella to decide what the next move should be; it is unclear whether Italy will have elections or rather a so-called technical government with the present Parliament.

The referendum mirrors similar votes in other nations, such as the United Kingdom’s Brexit vote to leave or remain in the EU. “The electorate voted against the establishment, against Brussels”. If they pulled out, things could get messy.

Renzi’s intention was to change the 1948 constitution by reducing the power of Parliament’s upper house, the Senato, through a reduction in members – cutting it from 315 to 100, making it more of a consultative assembly.

Italians living in the north-east of Scotland have reacted to the outcome of the country’s referendum. Please see our terms of service for more information.

After the budget is passed, the likely scenario will be that Mattarella asks someone else in the centre-left Democratic Party to try to form a government and work with the same parliament until elections in spring 2018.

Among the names touted to head it are Renzi’s finance minister, Pier Carlo Padoan; the president of the Senate, former anti-Mafia prosecutor Pietro Grasso; and Foreign Minister Paolo Gentiloni.