Renzi to quit after passing the budget

ROME: Italian Prime Minister Matteo Renzi has formally resigned after a crushing referendum defeat that has sent shockwaves around Europe — though his departure will be delayed by a final task, passing a budget.

Renzi handed his resignation to President Sergio Mattarella after Italians resoundingly rejected his constitutional reform proposals in Sunday’s referendum, to the delight of the country’s populist leaders, fresh after Brexit and Donald Trump’s US victory.

The departure of the centre-left premier — who had staked his future on the outcome of the vote — plunges Italy into political uncertainty and casts a shadow over the future of the euro zone’s third-largest economy.

In an apparent bid to ease investor fears, the presidency said in a statement that Mattarella had “asked the prime minister to postpone his resignation” until the 2017 budget has been passed, a move expected by the end of the week, according to Italian media.

The government has already won a vote of confidence on the budget in the lower house of parliament.

Renzi, who in 2014 became Italy’s youngest-ever premier, was left with no option but to quit after his proposals to streamline parliament were rejected by voters by a decisive 59-41 per cent margin.

The 41-year-old former mayor of Florence, who came to power promising radical reform, defended his record. “1,000 difficult but wonderful days. Thanks to everyone. Viva l’Italia,” he wrote on Facebook. Italian media said he told his cabinet he had agreed to see the budget passed before his departure “out of a sense of responsibility”.

Market reaction to Renzi’s departure has been subdued. The euro briefly sank to a 20-month low as investors fretted that political instability could scupper efforts to resolve debt-ridden Italy’s long-running banking crisis.