Matteo Renzi Says He Will Resign After Losing Referendum

As was reported earlier, Prime Minister Matteo Renzi is expected to deliver a statement on the Italian referendum at midnight Italian time. According to Italy's RAI, the statement has been delayed by 20 minutes. It is unclear what the topic of Renzi's statement will be although speculation is rampant that the 41 year old prime minister may announce his resignation, opening the way for a new government and/or new elections.

Moments ago, the Twitter-loving prime minister, sent out the following tweet to his nearly 2.8 million followed: "Thanks to all of you. In a few minutes I will be speaking to you directly from Palazzo Chigi. Long live Italy. PS Am coming, am coming'

Watch Renzi's speech live below:


Among the key headlines, Renzi says "I have lost, and adds that, despite the result, the high turnout and the vivid electoral campaign, the referendum has been a "feast of democracy." He takes full responsibility for the defeat and says "No" leaders now have great responsibilities. Other highlights:

  • RENZI CONCEDES REFERENDUM DEFEAT, SAYING PEOPLE HAVE SPOKEN
  • ITALY PM RENZI SAYS I TAKE FULL RESPONSIBILITY FOR DEFEAT
  • RENZI: "NO" LEADERS NOW HAVE GREAT RESPONSIBILITIES
  • RENZI: WE HAVE FAILED IN CONVINCING CITIZENS, WE WANTED TO WIN

And there it is: Renzi says he intends to resign and adds that his government ends here:

  • RENZI SAYS HE WILL OFFER HIS RESIGNATION TO PRESIDENT
  • RENZI: MY GOVERNMENT ENDS HERE

Renzi also said that he is not ready to stay on as the head of a caretaker government, saying "I look forward to greeting my successor with a smile, whoever he is."

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So now that Renzi has stepped down here are three possible scenarios, via the WSJ:

1. New Renzi Government - this is now unlikely after Renzi's farewell speech:

Italian President Sergio Mattarella could ask Mr. Renzi to reshuffle his cabinet and form a new government. However, Mr. Renzi has said in recent days that he is unlikely to accept such an option, given that he would be in a much-weakened position following the vote.

2. A Caretaker Administration:

 Mr. Mattarella could ask someone else to lead a new government with a limited mandate to oversee the drafting of a new electoral law and pass the 2017 budget. One candidate is Economy Minister Pier Carlo Padoan, who could help soothe markets that have been nervous about political instability following a no vote. Others include Pietro Grasso, speaker of Italy’s Senate, and Dario Franceschini, the current culture minister.

3. Electoral-Law Snarl:

Major political parties are pushing to change an electoral law passed last year that would give extra seats in Parliament to any party winning 40% or more of the vote. That measure was intended to make for more stable governments. Establishment politicians now worry that it could help the populist 5 Star Movement gain power and want to rewrite the rules before any new national election.

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Meanwhile the EURUSD has tumbled to the lowest level since March 2015.