ROME—Italian voters dealt Premier Matteo Renzi a stinging defeat on his reforms referendum, triggering his resignation announcement and galvanizing the opposition 5-Star Movement’s determination to gain national power soon.
The outcome also energized the anti-immigration Northern League party, an ally of Marine Le Pen, a candidate in France’s presidential race.
The blow to Renzi also delivered a rebuke to Italy’s establishment, which had staunchly backed the referendum. The political upset, which could spook investors, comes just as the government had made some inroads in cutting the staggering rate of youth employment and while Italy’s banks have urgent need for recapitalization.
During the campaign, the risk of political instability in Italy, Europe’s fourth-largest economy, triggered market reaction, with bank stocks sinking and borrowing costs on sovereign debt rising.
The Movement, led by anti-euro comic Beppe Grillo, spearheaded the No camp on the constitutional reforms, a package aimed at updating Italy’s post-war Constitution that Renzi had depicted as vital to modernizing Italy and reviving its economy.
Characteristically confident—detractors say arrogant—Renzi, 41, and Italy’s youngest premier, had bet his political future—or at least his current premiership—on a Yes vote win, and campaigned hard for a victory in recent weeks to confound opinion polls indicating that it would likely go down to defeat.
With votes counted from nearly all the polling stations in Sunday’s referendum, the No’s were leading Yes votes by a 6-to-4 margin, Interior Ministry data indicated. The turnout of 67 percent was especially high for a referendum, and more in line for a vote for Parliament.
“I lost and the post that gets eliminated is mine,” Renzi said early Monday about an hour after the polls closed. “The government’s experience is over, and in the afternoon I'll go to the Quirinal Hill to hand in my resignation” to President Sergio Mattarella.
