As expected after this week’s referendum defeat, Italian Prime Minister Matteo Renzi has formally resigned. This throws Italy in to a further state of turmoil. Parties from across the spectrum in Italy have pushed for early elections in order to ensure a smooth transition in the government after Renzi’s bruising loss at the weekend.
As per his word Renzi waited until senate had passed the budget for next year before resigning as he’d earlier stated he would. It is expected that a politician from his party will take over at the end of any consultation process. President Sergio Mattarella has started consulting on the setting up of a caretaker government to run the country after Renzi’s departure. He will be against pressure to bring forward the elections due in 2018 in order to support political stability in the country. But the current thinking is that his party will continue to lead the country up until elections that are expected in 2018. But all parties have stated that they could be ready earlier if necessary.
The current crisis has fell unfortunately at the same time as a banking crisis in the country, with at least one bank Monte dei Paschi di Siena potentially requiring a bailout from the government to avoid going under. It is understood that the government was preparing to take a significant bite out of the business in the form of buying bonds, though this has yet to formally be announced, and with Renzi’s departure and some political instability may struggle to actually happen in time.
Renzi’s referendum was savagely defeated by 59% to 41% over the weekend, as the country voted against wide ranging reform to the country’s political system. Where this leaves the country now is uncertain, as it struggles to pull itself out of financial difficulty. It is widely expected that the country may need to head to the IMF to request a bailout similar to Greece during its own financial turmoils. International markets have been highly varied with the uncertainty regarding Italy’s future, and any potential bailout.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.