A resounding defeat for Italy’s establishment

Renzi crushing defeat on Sunday forces him to resign as he promised if Italians rejected his plan to reduce the role of the upper house Senate and regain powers from regional authorities.

While all the votes have been counted in the country, the overseas ballots are not yet in, which could imply a small percentage shift without impacting the outcome. On a turnout of 68.48 percent, the “no” vote won by a seismic 59.26 percent, with the “yes” vote trailing behind at only 40.74 percent.

An exit poll by the Piepoli Institute for state television station RAI, estimated “yes” voters at 42-46 percent, compared with 54-58 percent for “no”. Two other polls by Tecne’ for privately owned TV channel Mediaset, by EMG Acqua for La 7 gave the winners a similar lead of at least 10 points.

“Tomorrow afternoon I will call a cabinet meeting … I will then go to the Quirinale, where I will tender my resignation to the president,” Renzi said. The Quirinale is the current official residence of the President of the Italian Republic, Sergio Mattarella.

Matteo Renzi’s defeat deals a blow to the European Union, already reeling from a deluge of migrants, terror attacks and the rise of anti-establishment forces. The outcome is a stinging rebuke of the open-border, globalist establishment in Europe.

Italy is the next country after Britain to reject the political status quo, while Austria voted narrowly against the nationalist candidate Norbert Höfer on Sunday. Both elections were closely watched.

Opposition leader Matteo Salvini, of the anti-immigrant Northern League, said that if the exit polls are confirmed, the referendum will be a “victory of the people against the strong powers of three-quarters of the world”.

“Renzi is going to go and with him the powerful lobbies who were also defeated,” Renato Brunetta, the parliamentary leader of former prime minister Silvio Berlusconi’s centre-right Forza Italia party, told the Telegraph.

The anti-immigrant Northern League party, an ally of French far-right leader Marine Le Pen, has called for an early general election in Italy.

The prime minister’s resignation could well mean early elections next year and the possibility of an anti-euro party, the opposition 5-Star Movement of Beppe Grillo gaining sufficient ground for another major upset.

Renzi admitted that the vote had been a “clear” rejection of the proposed constitutional reform of the euro zone’s third-largest economy. “The experience of my government ends here,” he told the media.

Europe’s establishment feared that victory for the Italian opposition “no” camp would cause renewed turmoil for Italy’s banks, pushing the euro zone towards a fresh crisis and thereby threatening their hold on power.

The country’s banks have bad debts totalling some €280bn. Italy’s third largest bank, Monte dei Paschi, needs a €5bn recapitalisation and now, thanks to the referendum, borrowing costs are rising, making it very expensive to get capital for a bank which has already had two failed rescues.

Reuters reported that the European Central Bank is preparing to step in if needed, but market analysts predicted a similar instability after Brexit.