Italy
Italian Prime Minister Matteo Renzi/Photo courtesy AFP

Italy is covered with political and economic uncertainty following the defeat of Prime Minister Matteo Renzi in Sunday’s referendum.

The Italian PM announced he was stepping aside after his constitution reform plan was rejected by voters.

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Renzi met President Sergio Mattarella and will offer him his resignation later, the BBC reports.

Mattarella must then decide whether to appoint a new PM or hold elections.

Shaky economy

And there are fears the instability may fuel a deeper crisis for the European country’s already fragile banking sector.

There is report of a consortium organising a possible bailout for one leading bank, Banca Monte dei Paschi di Siena. They are to meet on Monday to consider whether to pursue the rescue bid, according to a BBC report.

A look at the vote

After majority of the ballots were counted, the No vote led with 60% against 40% for Yes, with a 70% turnout.

Renzi, who desired to change Italy’s arduous political system, staked his political future ahead of the referendum. He wanted more powers for the central government, while reducing those of the Senate.

His opponents had argued that the reforms would give the prime minister too much power. And by virtue of their vote, the electorates agreed.

But report further revealed the referendum was more than a vote on constitutional reform, as it was widely regarded as a chance to reject establishment politics.

Massive vote against

The No faithful had a huge victory. They were headed by the Five Star Movement, a medley of populist parties, which capitalised on Mr Renzi’s declining popularity, following years of economic stagnation.

The problems caused by tens of thousands of migrants arriving in Italy from Africa also worked in their favour during the vote..