Before the weekend came to a close, Italy said no to constitutional reform and subsequently, said goodbye to their Prime Minister, Matteo Renzi. The referendum result is a huge victory for right wing and anti-establishment parties. However, the decision could pull Italy into political disarray.
About 59% of Italians voted against the referendum, a startling majority that exceeded polling expectations. While taking to the stage to admit defeat Renzi’s statement pushed the Euro to fall to 20-month lows, sliding 1.3%.
Renzi is the second European leader this year to resign after being defeated by populist backlash. The vote became an instrument voters used to protest against the sluggish economic growth but also against Renzi himself. As many Italians are opposed to his economic and immigration stance.
Some analysts believe that the referendum could spark another European financial crisis. Italian banks have almost 300 billion euro in bad debt. The Italian banking sector is down almost 50% since the start of 2016. Renzi’s replacement must have a clear plan on how to tackle this heavy load of debt.
It is unknown who will become the next Italian Prime Minister, possibilities include; Finance Minister Pier Carlo Padoan, Senate Speaker Pietro Grasso and Culture Minister Dario Franceschini. Renzi’s successor will have to push change for Italy as more and more voters become restless with the status-quo.