Italian PM Renzi resigns after crushing referendum defeat

Matteo Renzi has resigned as Italian prime minister after his constitutional reforms were roundly rejected in a referendum vote on Sunday.

Renzi had said in the lead up to the crucial vote that if the reforms were not voted in he would stand down from his position, and although the defeat was expected, the scale not so much, as 59% of Italians voted no. There was a high turnout of 65% ensuring that Renzi could have little room for complaints, as his own unpopularity led to the demise of the proposals as much as anything else.

The reforms set out by Renzi were an attempt to lower the size and reduce the power of the country's Senate, which currently has the same amount of power as the lower house of parliament.

However, critics of the campaign said that the proposals were undemocratic and would place too much power in the hands of the ruling government.

"My experience in government ends here. I did all I could to bring this to victory," Renzi said. "If you fight for an idea, you cannot lose."

"My experience in government ends here. I did all I could to bring this to victory," Matteo Renzi

Opposition to Renzi's plans came from the Five Star Movement and the Northern League, both very much far right populist organisms which joined together in an attempt to defeat the referendum proposal. It is the latest sign of the increasing influence of populism in global politics, following the success of the Brexit campaign in the UK, Donald Trump's victory in the US and the rise of Marine Le Pen's National Front in France.

Global markets have so far evaded an immediate response to the referendum result and Renzi's resignation, with many analysts pointing to the fact that a "no" vote had already been priced in towards the end of last week.

However, mounting pressure on the Italian banking system could lead to the biggest casualties arising from the political uncertainty.

"The stability is needed for the Banking sector in Italy above all else with Monte dei Paschi looking over the precipice and could well be looking at state aid in the coming days," said GKFX chief market analyst James Hughes. "Uncertainty is the biggest risk to the markets and with comparisons already being made to the Trump and Brexit votes, Italy is very much in limbo."