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Italy's PM resigns after referendum defeat
Organization: Department of International Cooperation        Publish Date: 2016-12-12 16:33
Sources: BBC News; CNN

Italian Prime Minister Matteo Renzi handed in his resignation to Italy's president on Dec. 7, after losing a referendum he had staked his career on three days earlier.

Renzi had promised President Sergio Mattarella to wait until the Senate passed the 2017 budget, which it did earlier the same day. The president will start consultations with political parties over forming a caretaker government on Dec. 8.

President Mattarella is expected to ask a member of Mr. Renzi's cabinet, or a politician from his Democratic Party, to try to form a new government, according to Reuters.

In the meantime, two of the big winners in the referendum, the anti-EU Northern League and anti-establishment Five Star Movement, are pushing for early elections. The Five Star Movement party could campaign on a promise to hold a referendum on Italy's continued membership in the European Union.

Renzi wanted to strengthen the central government and weaken the Senate, the upper house of parliament. His opponents - including some within his own party - had argued that the reforms would give the prime minister too much power. The electorate agreed. The turnout in the referendum was nearly 70%, with nearly 60% voting against Renzi's plans for constitutional reform.

Italy's political turmoil has also led to days of uncertainty in international markets, amid questions over the fate of Italy's indebted banks, especially its third largest, Monte dei Paschi, which is seeking €5 billion (US$5.3 billion) to recapitalize.

Markets moved higher and Italy's government bond yields fell on Dec. 7 amid reports that the government in Rome was preparing to take a €2 billion controlling stake in the bank and to ask for a €15 billion euro zone loan to bail out the troubled banks.
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