MILAN – Italians vote Sunday in a referendum on constitutional reforms that is being closely watched abroad to see if Italy becomes the next country to reject the political status quo.

Premier Matteo Renzi has said he will resign if the reforms are rejected, and opposition politicians have vowed to press for a new government if voters reject the proposed constitutional changes.

The premier made no comment as he voted in Pontassieve, a Tuscan town east of Florence, along with his wife, Agnese Landini. He is expected to return to Rome later this afternoon to watch the outcome of the vote.

The risk of political instability in Italy, Europe's fourth largest economy, has triggered market reaction before the vote, with bank stocks sinking and the borrowing costs on sovereign debt rising.

European partners were closely monitoring the vote, which comes on the same day as a runoff in Austria that could put a right-wing populist in power for the first time since World War II.

A headline in the Frankfurter Allgemeine Zeitung said Renzi's "arrogance is his shortcoming," noting that "Europe is at stake" in the vote. The Guardian noted that the referendum was among a series of votes in Europe that could "conceivably herald the end of the European project in its current form."

The referendum aims to streamline Italy's cumbersome lawmaking process by reducing the powers of the Senate, while also removing some key decision-making powers from regions.

Renzi has argued that the reforms dismantle bureaucracy and will make Italy more attractive to investors and help his drive to transform the country. But his decision to tie the outcome to this political future transformed the vote into a plebiscite on his leadership.

Political opponents are hoping to tap populist sentiment that has been gaining ground with the U.K. vote in June to leave the European Union and the U.S. presidential victory by billionaire political outsider Donald Trump.

A "yes" vote would strengthen Renzi's 2 ½-year-old government, giving it impetus to complete its five-year term and time to prepare for elections in 2018, while a "no" vote would favor early elections sometime next year.

Three former premiers – Silvio Berlusconi, Massimo D'Alema and Mario Monti – have come out against the reform, albeit for different reasons. Berlusconi has argued that it concentrates too much power in the premier, while Monti says the reforms don't go far enough and downplayed the risk of political instability.

How the vote plays out politically is likely to depend on the turnout and the margin of the decision.

"For example, if only 30 percent of eligible voters turn out, the result will hardly be influential," the founder of La Repubblica, Eugenio Scalfari, wrote in a column on Sunday.

If voters reject the referendum, Renzi is expected to announce his resignation right away. But analysts say President Sergio Mattarella, whose job it would be to designate someone to form a new government, is unlikely to move until parliament passes a new budget law.

More than 46 million Italians were eligible to cast votes from 7 a.m. until 11 p.m. (0600 GMT until 2200 GMT) while another 4 million were registered to vote abroad. The overseas votes were being tallied under guard at a warehouse outside of Rome. </s> The Latest on the Italian referendum (all times local):

Germany's finance minister is calling for a calm response to the outcome of Italy's constitutional referendum and says that there's no basis to talk of it triggering a "euro crisis."

Wolfgang Schaeuble said as he arrived for a meeting with his eurozone counterparts in Brussels that Italy needs a government that's capable of acting and he hopes it will continue pursuing reforms despite the referendum result.

Schaeuble added: "I think we should take note of this with a degree of calm. The Italians have decided; we have to respect that. They will make the best of it."

The minister said: "There is no reason to talk of a euro crisis and there is certainly no reason to conjure one up."

The head of the group of 19 countries that use the euro currency says there is no need for "emergency steps" after Italian voters rejected constitutional reforms.

Jeroen Dijsselbloem, who is also Dutch finance minister, tried to calm concerns that uncertainty after the Italian vote and prime minister's resignation could weaken the euro.

He told reporters in Brussels that "it doesn't really change the situation economically in Italy or in the Italian banks. It doesn't seem to require any emergency steps."

He also insisted that the Italian vote against a reform by pro-EU Prime Minister Matteo Renzi doesn't mean that anti-EU forces will win in upcoming votes in France or the Netherlands.

Ratings agency Standard & Poor's says the rejection of Italy's proposed constitutional reforms in a referendum will not affect its credit rating for the country.

S&P, which rates Italy at BBB-, said the proposed reform would have had potentially positive benefits. But its rejection "does not have an immediate impact on Italy's creditworthiness."

It added Monday that the vote outcome "does not have immediate implications for Italy's economic or budgetary policies beyond likely near-term changes in Italian politics."

Italian markets opened lower on Monday, but soon recovered to trade higher.

Germany's foreign minister has expressed concern about the result of Italy's referendum, while lauding the loss of a right-wing populist in presidential elections in Austria.

Speaking during a visit to Greece, Frank-Walter Steinmeier said that while the result of the Italian referendum on constitutional reform, which has led Italian Premier Matteo Renzi to resign, was "not the end of the world," it was also "not a positive development in the case of the general crisis in Europe."

Steinmeier said that Germany was watching the developments "with concern."

The foreign minister said Renzi's government had been moving in the right direction, and he said Germany hoped the new Italian government would continue along the same path.

The European Union's finance commissioner has played down the impact of Italy's referendum on the euro and European unity.

Pierre Moscovici told reporters in Brussels that he has "full confidence in Italian authorities to manage this situation" after Italian voters rejected constitutional reforms and pro-EU Prime Minister Matteo Renzi announced his resignation.

With the euro trading lower on world markets, Moscovici said, "I'm very confident in the capacity of the eurozone to resist all kind of shocks."

French Finance Minister Michel Sapin insisted that the Italian referendum "is a question of internal politics. The referendum wasn't about Europe."

Sapin and Moscovici hailed the victory of a left-leaning, pro-EU Austrian president and defeat of his far right challenger. Moscovici said: "Populism is not inevitable. The extreme right is not irresistible."

A senior European Parliament lawmaker from Germany says Italy's reform referendum heralds a period of instability and is a setback for those who want to see reform in Europe.

Italian Premier Matteo Renzi announced his resignation after losing Sunday's referendum on constitutional reforms. Asked what that means for Europe, Manfred Weber, the leader of the main conservative group in the European Parliament, told ZDF television: "Initially, a phase of instability now lies ahead of us — how will one of the biggest countries in the European Union now stabilize itself?"

He added that "it is also a setback for those who want readiness for reform, those who want European countries to change. That is the only way we can deal with globalization."

Luxembourg's foreign minister, Jean Asselborn, said the vote was an Italian domestic issue and he doesn't see a defeat for Europe. He told German news agency dpa: "Italy voted on a reform. It would be wrong to extrapolate that now to the European level. It was a domestic political argument."

He added, however, that "it would be bad for the euro if the government crisis dragged on for a long time."

Italy was plunged into political and economic uncertainty following voters' resounding rebuke of Premier Matteo Renzi's proposed constitutional reforms.

Renzi announced he would quit following Sunday's referendum vote, in which 60 percent of voters rejected his reforms and signaled they wanted a change in political direction. Renzi is expected to hand in his resignation to President Sergio Mattarella later Monday.

The Milan Stock Exchange opened down 2 percent, but many bank shares were suspended due to excessive volatility meaning the hit could be even deeper.

The results hit Italy's sovereign debt, increasing the spread on Italy's 10-year bonds to 2 percent, from 1.7 percent on Dec. 1 and a record low of just over 1 percent last March and April. </s> MILAN — Italian voters dealt Premier Matteo Renzi a resounding rebuke by rejecting his proposed constitutional reforms, plunging Europe’s fourth-largest economy into political and economic uncertainty Monday.

Renzi announced he would quit following Sunday’s referendum vote, in which 60% of voters rejected his proposals and signalled they wanted a change in political direction. Renzi, who had boldly staked his political future on winning the referendum, was expected to hand in his resignation to President Sergio Mattarella later Monday.

The unexpectedly large margin of defeat with a robust voter turnout of 68.5% appeared to rule out any chance that Renzi would be offered another shot at forming a government. Analysts did, however, expect Mattarella to ask Renzi to stay on long enough to pass the new budget, with a target date of Dec. 23.

The vote energized the anti-establishment 5-Star Movement and the anti-immigrant Northern League, whose leader has allied himself with far-right figures in Europe including France’s Marine Pen.

While Italy’s opposition parties were united in antipathy for Renzi’s policies and reform course, they have little else in common and have already begun vying to position themselves for a new election, although the timing of any vote remained unclear. Analysts expect that Mattarella will appoint a transition government to draft a new election law, with speculation centring on either Renzi’s finance minister, Pier Carlo Padoan, or the president of the Senate, Pietro Grasso, to lead the effort.

But that course is already facing opposition.

Northern League leader Matteo Salvini called for an immediate election this winter “because real change happens only through electoral victory.”

The current election law, which Renzi wanted to reform, would hand a huge bonus of seats to the lower house while maintaining a proportional system for the upper house, raising the potential for parliamentary gridlock.

With much wrangling ahead, the risk facing Italy is “a prolonged muddle-through period, the emergence of an ineffective, patched-up coalition government in the postelection phase and continuously poor economic performance,” said Wolfango Piccoli, a political analyst at the Teneo Intelligence consultancy.

European partners sought to downplay the risk for the common euro currency and European unity.

“This is a crisis of government, not a crisis of state, and it’s not the end of the West. But it’s certainly not a positive contribution against the backdrop of the crisis in Europe,” German Foreign Minister Frank-Walter Steinmeier said in Athens.

The EU finance commissioner, Pierre Moscovici, told reporters in Brussels that “I’m very confident in the capacity of the eurozone to resist all kind of shocks.”

The main stock index in Milan was volatile. It opened down 2%, with many bank shares suspended due to excessive volatility, but recovered to trade down only 0.9%.

Investors had been anticipating Renzi’s defeat for several days, and had sold off Italian stocks and bonds. Monday’s sanguine market reaction can also be attributed to the fact that Italy’s markets indirectly enjoy a big backstop from the European Central Bank.

The central bank for the 19-country eurozone is buying 80 billion euros ($85 billion) every month in bonds, including government debt, across the currency bloc. It is expected on Thursday to decide to extend that program beyond its current end date of March. The bond purchases aim to boost growth and inflation but also effectively help keep low government borrowing rates. That is crucial for Italy, which has a massive public debt load of 130% of GDP.

Italy’s 10-year bond yield was stable at 2.03% on Monday. That’s up from 1.65% last month but is still very low for a highly indebted country like Italy. It’s also far short of the 7% rate that in 2012 had created fears that Italy might default and fall out of the euro.

Still, the result cast doubts on the ability of Italy’s third-largest lender and the worst performer in last summer’s EU stress test, Monte Paschi di Siena, to execute a rescue plan that includes a 5 billion euro market recapitalization. Advisers are meeting to discuss the vote’s impact, according to Italian media. Italy’s biggest bank, UniCredit, also is to present to analysts its new business plan next week in London.

Renzi swept into power 2 1/2 years ago on a pledge to dismantle the system, claiming the moniker of demolisher. His brash ways divided his own party, however, and his confidence was widely perceived as arrogance, even in other European capitals and especially in Brussels, where he had grown increasingly bold in pressing for flexibility on the budget.

“I lost and the post that gets eliminated is mine,” Renzi said early Monday after the polls closed. “The government’s experience is over.”

Frances D’Emilio in Rome, Carlo Piovano in London and Frank Jordans in Berlin contributed to this report. </s> Media playback is unsupported on your device Media caption Matteo Renzi: "I lost and I say this out loud even if with a lump in my throat"

Outgoing Italian PM Matteo Renzi has agreed to stay in power until the Senate passes its 2017 budget in the coming days, the president says.

Mr Renzi formally resigned on Monday after his defeat in a constitutional referendum a day earlier, but the president requested the delay.

President Sergio Mattarella will later have to either choose a new prime minister or call early elections.

European leaders have been playing down the risks of fallout from the crisis.

It comes amid fears of long-term instability for the country's troubled banking sector in the long-term. Shares in Italian banks lost ground following news of Mr Renzi's defeat.

Sunday's No vote on constitutional reform was widely seen as a rejection of establishment politics in Italy.

What happens next?

Mr Renzi held a final brief cabinet meeting on Monday evening, before travelling to the presidential palace to submit his formal resignation.

President Mattarella then asked him to stay on for the budget bill, which is expected to be passed by the Senate in a matter of days.

He wanted to avoid "the risks of a provisional budget", the president said in a statement (in Italian).

The BBC's James Reynolds in Rome says the move will help to reassure markets that the referendum result has not derailed the country's affairs.

Anti-establishment opposition parties have been calling for early elections, although it is unclear yet whether this will happen.

Instead, the president may appoint a caretaker administration led by Mr Renzi's Democratic Party, which would carry on until an election due in the spring of 2018.

Finance Minister Pier Carlo Padoan is the favourite to succeed Mr Renzi as prime minister.

Why did he lose?

The No vote won with nearly 60% against 40% for the Yes campaign. With a turnout of nearly 70%, it was a heavier than expected defeat for the government.

Mr Renzi staked his political future on his attempt to change Italy's cumbersome political system. He wanted to strengthen central government and weaken the Senate, the upper house of parliament.

Image copyright EPA Image caption Five Star's Beppe Grillo led the No campaign in the referendum

His opponents - including some within his own party - had argued that the reforms would give the prime minister too much power. The electorate agreed.

More than a resounding victory for the No camp, it was a chance for a medley of populist parties to reject establishment politics.

The opposition, headed by the Five Star Movement, capitalised on Mr Renzi's declining popularity, years of economic stagnation, and the problems caused by tens of thousands of migrants arriving in Italy from Africa.

After the vote, Mr Renzi defended his record, saying exports and job numbers were up and unemployment was down to 11.7%.

Image copyright EPA Image caption Matteo Renzi visited the presidential palace on Monday evening

Five Star's leader, Beppe Grillo, has called for an election "within a week".

How is Europe reacting?

The result is being seen as a blow to the EU, although there is no question of Italy leaving the union.

Both Five Star and the Northern League are opposed to the eurozone but not to membership of the EU itself.

Image copyright Reuters Image caption The No campaign's victory was bigger than expected

Reuters news agency quoted German Finance Minister Wolfgang Schaeuble as saying there was no reason for a euro crisis but that Italy urgently needed a functioning government.

Meanwhile, a spokesman for Chancellor Angela Merkel said she "took note with regret" of Mr Renzi's resignation but Germany would offer to work closely with the next Italian government.

Image copyright Twitter

But the leader of the far-right Front National in France, Marine Le Pen, tweeted: "The Italians have disavowed the EU and Renzi. We must listen to this thirst for freedom of nations."

What will it do to the economy?

Markets seemed to have taken Mr Renzi's departure in their stride. The euro fell initially to a 20-month low but rebounded again. Shares in Italian banks lost ground on Monday afternoon, following a dip and rebound in the morning.

But there are concerns over the long-term financial stability in the eurozone's third largest economy. The economy is 12% smaller than when the financial crisis began in 2008.

The banks remain weak and the country's debt-to-GDP ratio, at 133%, (second only to Greece's in the eurozone) means many Italian banks are in need of refinancing.

There is a risk that the failure of a major bank - such as the troubled Banca Monte dei Paschi di Siena - could set off a wider crisis, but repairing the banks becomes more difficult amid political uncertainty. </s> MILAN (AP) — Italian voters dealt Premier Matteo Renzi a resounding rebuke by rejecting his proposed constitutional reforms, plunging Europe's fourth-largest economy into political and economic uncertainty Monday.

Renzi announced he would quit following Sunday's referendum vote, in which 60 percent of voters rejected his proposals and signaled they wanted a change in political direction. Renzi, who had boldly staked his political future on winning the referendum, was expected to hand in his resignation to President Sergio Mattarella later Monday.

The unexpectedly large margin of defeat with a robust voter turnout of 68.5 percent appeared to rule out any chance that Renzi would be offered another shot at forming a government. Analysts did, however, expect Mattarella to ask Renzi to stay on long enough to pass the new budget, with a target date of Dec. 23.

The vote energized the anti-establishment 5-Star Movement and the anti-immigrant Northern League, whose leader has allied himself with far-right figures in Europe including France's Marine Pen.

While Italy's opposition parties were united in antipathy for Renzi's policies and reform course, they have little else in common and have already begun vying to position themselves for a new election, although the timing of any vote remained unclear. Analysts expect that Mattarella will appoint a transition government to draft a new election law, with speculation centering on either Renzi's finance minister, Pier Carlo Padoan, or the president of the Senate, Pietro Grasso, to lead the effort.

But that course is already facing opposition.

Northern League leader Matteo Salvini called for an immediate election this winter "because real change happens only through electoral victory."

The current election law, which Renzi wanted to reform, would hand a huge bonus of seats to the lower house while maintaining a proportional system for the upper house, raising the potential for parliamentary gridlock.

With much wrangling ahead, the risk facing Italy is "a prolonged muddle-through period, the emergence of an ineffective, patched-up coalition government in the postelection phase and continuously poor economic performance," said Wolfango Piccoli, a political analyst at the Teneo Intelligence consultancy.

European partners sought to downplay the risk for the common euro currency and European unity.

"This is a crisis of government, not a crisis of state, and it's not the end of the West. But it's certainly not a positive contribution against the backdrop of the crisis in Europe," German Foreign Minister Frank-Walter Steinmeier said in Athens.

The EU finance commissioner, Pierre Moscovici, told reporters in Brussels that "I'm very confident in the capacity of the eurozone to resist all kind of shocks."

The main stock index in Milan was volatile. It opened down 2 percent, with many bank shares suspended due to excessive volatility, but recovered to trade down only 0.9 percent.

Investors had been anticipating Renzi's defeat for several days, and had sold off Italian stocks and bonds. Monday's sanguine market reaction can also be attributed to the fact that Italy's markets indirectly enjoy a big backstop from the European Central Bank.

The central bank for the 19-country eurozone is buying 80 billion euros ($85 billion) every month in bonds, including government debt, across the currency bloc. It is expected on Thursday to decide to extend that program beyond its current end date of March. The bond purchases aim to boost growth and inflation but also effectively help keep low government borrowing rates. That is crucial for Italy, which has a massive public debt load of 130 percent of GDP.

Italy's 10-year bond yield was stable at 2.03 percent on Monday. That's up from 1.65 percent last month but is still very low for a highly indebted country like Italy. It's also far short of the 7 percent rate that in 2012 had created fears that Italy might default and fall out of the euro.

Still, the result cast doubts on the ability of Italy's third-largest lender and the worst performer in last summer's EU stress test, Monte Paschi di Siena, to execute a rescue plan that includes a 5 billion euro market recapitalization. Advisers are meeting to discuss the vote's impact, according to Italian media. Italy's biggest bank, UniCredit, also is to present to analysts its new business plan next week in London.

Renzi swept into power 2 1/2 years ago on a pledge to dismantle the system, claiming the moniker of demolisher. His brash ways divided his own party, however, and his confidence was widely perceived as arrogance, even in other European capitals and especially in Brussels, where he had grown increasingly bold in pressing for flexibility on the budget.

"I lost and the post that gets eliminated is mine," Renzi said early Monday after the polls closed. "The government's experience is over." </s> Italian Premier Matteo Renzi speaks during a press conference at the premier's office Chigi Palace in Rome, early Monday, Dec. 5, 2016. Renzi acknowledged defeat in a constitutional referendum and announced he would resign on Monday. Italians voted Sunday in a referendum on constitutional reforms that Premier Matteo Renzi has staked his political future on. (AP Photo/Gregorio Borgia)

ROME (Reuters) - Italian Prime Minister Matteo Renzi vowed to resign after suffering a crushing defeat on Sunday in a referendum on constitutional reform, tipping the euro zone's third-largest economy into political turmoil.

His decision to quit after just two and a half years in office deals a blow to the European Union, already reeling from multiple crises and struggling to overcome anti-establishment forces that have battered the Western world this year.

The euro fell to 20-month lows against the dollar, with markets worried that instability in the euro zone's third largest economy could reignite a dormant financial crisis and deal a hammer blow to Italy's fragile banking sector.

Renzi's resignation could open the door to early elections next year and to the possibility of an anti-euro party, the opposition 5-Star Movement, gaining power in the heart of the single currency. 5-Star campaigned hard for a 'No' vote.

"I take full responsibility for the defeat," Renzi said in a televised address to the nation, saying he would hand in his formal resignation to President Sergio Mattarella on Monday.

Mattarella will have to embark on a round of consultations with party leaders before naming a new prime minister -- Italy's fifth in as many years -- who will be tasked with drawing up a new electoral law.

Early projections said Renzi managed to win little more than 40 percent of the vote on Sunday following months of bitter campaigning that pitted him against all major opposition parties, including the anti-system 5-Star Movement.

Italy's parties will now have to work together on the new electoral law, with the 5-Star urging a swift deal to open the way for elections in early 2017, a year ahead of schedule.

Opinion polls show Renzi's Democratic Party (PD) is neck-and-neck with the 5-Star, which has called for a referendum on Italy's membership of the euro currency.

Renzi, 41, took office in 2014 promising to shake up hidebound Italy and presenting himself as an anti-establishment "demolition man" determined to crash through a smothering bureaucracy and redraw the nation's creaking institutions.

Sunday's referendum, designed to hasten the legislative process by reducing the powers of the upper house Senate and regional authorities, was to have been his crowning achievement.

However, his reforms so far have made little impact, and the 5-Star Movement has claimed the anti-establishment banner, tapping into a populist mood that saw Britons vote to leave the European Union and Americans elect Donald Trump president.

In one relief for mainstream Europe, Austrian voters roundly rejected on Sunday a candidate vying to become the first freely elected far-right head of state in Europe since World War Two, choosing instead a Greens leader as president.

The biggest immediate loser from the 'No' triumph in Italy could be Italy's third-largest bank, Monte dei Paschi di Siena, which is bowed by bad loans and is looking to raise 5 billion euros ($5.3 billion) this month to stave off collapse.

Investors are likely to shun the operation if political chaos prevails, meaning a state intervention will be needed to save it. Several other lenders also need a cash injection to stay afloat, raising fears of a domino effect.

Economy Minister Pier Carlo Padoan, seen as a possible candidate to replace Renzi, sought to calm nervous markets on Friday, saying there was "no risk of a financial earthquake" if 'No' wins, though there may be "48 hours of turbulence".

A Nov. 25 Reuters poll suggested investors would expect to demand an extra 25 basis points in yield to hold Italian debt over its German equivalent if the reform is rejected, with the euro dipping 1.25 percent.

The risk to stability, meanwhile, is enough to have the European Central Bank preparing to step in if needed. </s> Video: Italy's Prime Minister Matteo Renzi says he will resign following referendum defeat

Italian Prime Minister Matteo Renzi said he would resign following a stinging defeat on Sunday in a referendum over his proposals for constitutional reform. Deborah Lutterbeck reports. </s> Italian President Sergio Mattarella asked Foreign Minister Paolo Gentiloni on Sunday to try to form a new government, giving him a mandate to lead Italy out of a political crisis caused by the resignation of Matteo Renzi.

Gentiloni, a 62-year-old former journalist and Renzi loyalist, is set to be Italy’s fifth prime minister in as many years and the fourth in a row to take office without winning a national election.

He immediately began consultations with politicians to form a government which will have the pressing tasks of writing a new electoral law and propping up Italy’s fragile banks.

“I am aware of the urgent need to give Italy a government with full powers, to reassure our fellow citizens, to confront our international, economic and social priorities with the maximum commitment and determination,” he said minutes after Mattarella conferred the mandate.

Italy’s social and political divisions were laid bare during campaigning for a Dec. 4 referendum on constitutional reform which was roundly rejected, prompting Renzi to resign because he had staked his job on it.

All major parties have called for elections as soon as possible. But before any vote can take place, Mattarella has said Italy needs a new electoral law to replace one that applies only to the lower house and could be declared illegitimate in January by the Constitutional Court.

Elections are not due until 2018 but could be called as soon as parliament finishes rewriting the electoral law. Gentiloni said he would “facilitate, if possible, the parliamentary forces’ task of quickly defining new electoral rules.”

Commentators said that if his consultations go well, he could return to the presidential palace as early as Sunday night or Monday morning to present his list of proposed cabinet members to the head of state.

“It doesn’t matter if it’s resolved tonight or tomorrow. The important thing is that the markets already know that with Gentiloni there will be no radical change,” said Maurizio Caprara, a commentator for Italy’s Corriere della Sera newspaper.

Gentiloni said his government would move “within the same framework” as the outgoing government but Renzi’s Democratic Party (PD) is itself severely divided between backers of the former prime minister, such as Gentiloni, and opponents.

Once his cabinet is sworn in by the president, the government will then face votes of confidence in both houses of parliament. The ruling coalition, headed by the PD, has a majority in both so Gentiloni could win the votes in time to attend a European Union meeting on Thursday as prime minister.

The next prime minister will have to deal quickly with the country’s third-largest lender, Monte dei Paschi di Siena, which may need state intervention to avoid collapse.

Opposition parties such as the anti-establishment 5-Star Movement and former prime minister Silvio Berlusconi’s center-right group refused to take part in national unity government.

“Enough of governments that descend from above, enough of Renzi’s avatars ... the Italian people can’t stand this any more!” Alessandro Di Battista, a 5-Star leader, wrote on Twitter. </s> Italy’s referendum might well have been one of the biggest smoke screens in modern Italian politics. Many Eurosceptics have wrongly portrayed the vote as a plebiscite on Europe. What was presented as a noble institutional reform became a vote of confidence in the Italian government and the prime minister Matteo Renzi himself. In fact, it was nothing more than an all-too-familiar rejection of the Italian political establishment.

Renzi’s defeat was written in the stars; a sitting government linking its fate to a referendum almost always ends in tears. The historical examples are abundant. The Dutch and French referendums of 2005 on the European constitution were successfully hijacked by opposition parties, who turned them into a plebiscite on the government of the day. However, the example that best explains Renzi’s defeat is the 1969 referendum in France called by Charles de Gaulle.

The similarities are striking. Both votes proposed a drastic diminishing of the senate’s role and both of them wanted to change the relationship between regional and central government. Just like Renzi, De Gaulle personalised the referendum by announcing he would step down if the French voted “no”. More than 52% did so. The hero of the second world war had failed to understand that the France of the “deadlocked 1950s” had been replaced by the one of May ’68.

Matteo Renzi was equally blind in not recognising that Italians are fed up with the country being run – or rather: mismanaged – by the two old socialist and conservative groupings. In 2013, Renzi entered national politics as a young lion promising change, but he proved to be nothing more than a younger version of the old crocodile Silvio Berlusconi. He tried, but failed, to hide the fact that the main goal of the referendum was to give electoral bonuses to the two big parties and to punish political initiatives outside the old party structures.

The young crocodile struck a deal with the old one by trying to prevent new political movements from flourishing, despite the fact this is exactly what Italian voters crave: fresh blood in their out-of-date political system. The way politics in Italy is organised has a real and devastating effect on people’s lives. Youth unemployment in Italy is sky-high, yet the kids of well-connected families get well-paid jobs. Pension reform is on hold, while government officials give themselves very generous schemes. The list goes on.

It is because of these core issues that Italians voted “no”. It was not a vote against the European ideal, as some populists have tried to spin it. Italian voters are fed up with the static division of power between the two big groupings, who have mismanaged both Italy and Europe for decades.

The result of the presidential election in Austria, meanwhile, was a victory against the hard-right populism engulfing the west. It is telling that Arron Banks, a close confidant of Nigel Farage and bankroller-in-chief of Ukip, yesterday tweeted after the result that “I suppose they [the Austrian people] haven’t suffered enough rape and murder yet.” In one tweet, the mask slipped and the ugly xenophobic, racist face of the populist right was exposed for all to see.

It’s telling that many in Norbert Hofer’s party actually blamed Farage’s intervention for its defeat – after he went on US television to suggest that Hofer would propose a referendum on EU membership if he won. Austrians remain in favour of EU membership, with the latest polls suggesting 34% wish to leave the EU, down from 49% prior to the UK referendum. As a result of the Brexit referendum, support for EU membership has increased significantly across Europe. Did Europe’s Brexit backlash help defeat Hofer? Quite possibly.

Of course, this increase in support for EU membership must not be taken for granted. Arguably, the EU remains one or two elections away from disintegration. But the Austrian result shows that so-called “alt-right” populist coup attempts can be defeated, even in the current climate. If we dare to radically reform the EU, then the tide can be turned. The upcoming Brexit negotiations offer the possibility to start this process.

If the EU is to survive, people want to see that it is capable of producing results. They want a convincing European stimulus package to end the economic crisis and tackle the obscene youth unemployment plaguing so many European countries. They want a sizable border and coast guard that can actively manage the refugee crisis. Moreover, they want an EU that will intervene to manage globalisation so that it offers opportunities for everyone, not just the few. So long as mainstream politicians continue to play party-political games with referendums, instead of putting genuine radical reforms on the ballot paper, people will continue to vote “no”.
Italians go to the polls to for a referendum on whether to approve a constitutional law that amends the Constitution of Italy to reform the powers of the Italian Parliament. Prime Minister Matteo Renzi, who introduced the referendum bill, resigns after exit polls show that the no case is likely to be successful.