An Italian referendum to change the constitution failed by a nearly 60/40 margin. The referendum was pushed by Italian Prime Minister Matteo Renzi. After the referendum failed, Renzi announced he will resign.
To summarize, this is what has happened so yet another major blow to the European political status quo:
- Italy PM Renzi lost by a huge margin, with the latest estimate somewhere around 59% voting “No” to Renzi’s proposed constitutional referendum.
- In a speech moments after the results were announced, Renzi confirmed he would hand in his resignation tomorrow, adding he isn’t available to lead a caretaker government in a blow to many sellside forecasters he would do just that
- As Bloomberg notes, the scale of the loss and how quickly it happened cast a huge shadow on the fate of the continent headed into 2017.
- Italy’s opposition parties, from Grillo’s Five Star Movement to Calvini’s “Northern League” to Berlusconi’s Forza Italia, seem to be aiming for early elections as soon as possible, “after making a few tweaks to the current electoral law.” Grillo said this can be done in “one week.”
- The blow out result of the referendum is a confirmation that anti-euro populists are ascendent in Europe. Expect more long nights in the months to come, especially in France and the Netherlands which are the two next big potential dominoes to fall.
- What’s next? According to Bloomberg, “Italy is in for a period of high instability. The prospect of a prolonged, bitter electoral campaign won’t do any good to the country’s already anemic recovery. Not to mention its battered banks who may have to ask for public aid.”
- The EURUSD dropped to the lowest level since March 2015, sliding uner 1.05 briefly, but has since recovered some of its initial losses:
“The experience of my government ends here,” Renzi said in a televised address to the nation after early voting results suggested his ‘Yes’ camp may have lost the referendum by as much as 20 points.
Via ZeroHedge