5 Dec 2016

Italy's PM to resign over referendum defeat

5:00 pm on 5 December 2016

Italy's Prime Minister, Matteo Renzi, has announced he will resign after voters decisively rejected constitutional changes.

Italy's Prime Minister Matteo Renzi announces his resignation

Italy's Prime Minister Matteo Renzi announces his resignation. Photo: AFP

Holding back tears in the late-night news conference, he said he took responsibility for the referendum defeat.

Mr Renzi said the reforms he proposed would have cut Italy's bureaucracy and made the country more competitive, but the referendum was widely seen as a chance to register discontent with his leadership.

He had wanted to abolish the elected upper-house Senate and replace it with a chamber of regional representatives with diminished powers.

He had also planned a major economic reform package, and proposed taking back some key decision-making powers from the regions.

Mr Renzi said he would tell a Cabinet meeting on Monday afternoon that he was resigning, and then tender his resignation to the Italian president after two-and-a-half years in office.

An exit poll for state broadcaster RAI said between 42 and 46 percent voted to back reform, compared with 54 to 58 percent voting "No".

The first projections based on the official count pointed to a wider defeat with early indications having the "Yes" vote at 39 to 43 percent and the "No" at 57-61 percent.

His defeat is likely to lead to a caretaker government staffed with technocrats, appointed by the Italian president.

Another possibility is the calling of early elections in 2017.

Pundits are suggesting the success of the "No" vote could open the door to the election of the Italian Five Star Movement, a populist, anti-establishment party that says it wants to call another referendum on Italy's membership of the eurozone.

Five Star was the driving force behind the demands for a referendum on the constitutional reforms.

The president is expected to ask him to stay on at least until Parliament passes a budget bill later this month.

Opposition leader Matteo Salvini, of the anti-immigrant Northern League, called the referendum a "victory of the people against the strong powers of three-quarters of the world".

There has been an immediate reaction from right-wing leaders in Europe.

The leader of Front Nationale in France, Marine Le Pen, tweeted her congratulations to the Northern League.

"The Italians have disavowed the EU and Renzi. We must listen to this thirst for freedom of nations," she said.

The euro fell against the dollar immediately after the exit polls came out.

There have been growing concerns over financial stability in the eurozone's third largest economy.

The turnout was very high by Italian standards - about 60 percent of the electorate cast their vote.

Nearly two thirds voted in prosperous northern Italy but the turnout was much lower in the south.

- Reuters / BBC