(5 Dec 2016) Italian voters dealt Prime Minister Matteo Renzi a stinging defeat on his reform referendum, triggering his resignation announcement and galvanising the populist, opposition 5-Star Movement's determination to gain national power soon.
Renzi announced he would quit following Sunday's referendum vote, in which 60 percent of voters rejected his reforms and signalled they wanted a change in political direction. He is expected to hand in his resignation to President Sergio Mattarella later Monday.
Besides the "anti-establishment" 5-Stars, the outcome energised another "anti" party, the anti-immigrant Northern League, an ally of French far-right leader Marine Le Pen, a candidate in France's presidential race.
In voting "no," Italians also delivered a rebuke to Italy's industrialists, banks and other establishment institutions, which had staunchly backed the referendum.
The anti-reform victory, which could spook investors, comes just as the government had made some inroads in cutting the staggering rate of youth employment and while Italy's banks have urgent need for recapitalisation.
During the campaign, the risk of political instability in Italy, Europe's fourth-largest economy, triggered market reaction, with bank stocks sinking and borrowing costs on sovereign debt rising.
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