What Next for Italy After “No” Vote

Italian Prime Minister Matteo Renzi quit in the early hours of Monday after voters decisively rejected his proposal for constitutional reform.

Here’s an outline of the path ahead for Italy as markets awake to the results.

1. What happens Monday?

Renzi will hand in his resignation to President Sergio Mattarella on Monday afternoon. Mattarella’s aim will be to establish whether a new coalition government can be set up or early elections must be called and he may ask Renzi to delay his departure to allow talks with the speakers of both houses of parliament and with party leaders.

The margin of Renzi’s defeat is so big that he could also be forced out as leader of the Democratic Party (PD). Renzi’s office declined to comment on a report in newspaper Corriere della Sera on Monday that he might resign as party leader. Either scenario would significantly complicate and delay any attempt to form a new government, as the PD is the biggest party in parliament.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.