The Italian Prime Minister Mateo Renzi conceded defeat after the national referendum results were known last Sunday evening.

In an emotional speech at his Rome-based residence, Palazzo Chigi, he declared that he would submit his resignation to Italian Republic’s president, Sergio Mattarella, on Monday afternoon.

“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.”

The Italian PM had vowed that he would resign if the constitutional reform proposal was rejected in the referendum.

The constitutional reform plan proposed to centralise more power to the national government at the expense of the Senate. Under Italy’s 1948 constitution, law making process equally lies on Chamber of Deputies and the Senate. This so-called “perfect bicameralism” has been causing long delays on passing bills. The number of senators would be more than halved from 315 to 100 and second-chamber deputies would be no longer directly elected but appointed by regional governments. In conclusion, the role of the Senate would be dramatically diminished in order to speed up the law making process.

59.6% of the electors voted against the plan whereas 40.4% voted for it. The electoral  turnout was 65%.

In the run-up of referendum, anti-establishment parties were leading the No camp. Far left-wing internal opponents within the Renzi-lead Democracty Party shared the same stance claiming that the reform would increase excessively the president powers.

The referendum was more than a vote on constitutional reform. It was widely regarded as a chance to reject establishment politics and a plebiscite on the prime minister.

Leader of populist party 5 Star Movement Beppe Grillo reacted to the result saying on his blog that “democracy has won” against “propaganda by the regime”. Days later he pushed for holding national elections “in a week”

Uncertainty is served. The defeat concedes growing electoral expectations to the populist 5 Star Movement and anti-immigrant party Northern League. Both of them defend holding a referendum about leaving the Eurozone.

EU would fear from Italian political turmoil but main EU economic representatives show confidence.

“It doesn’t really change the situation economically in Italy or in the Italian banks. The problems that we have today are the problems that we had yesterday,” Eurogroup President Jeroen Dijsselbloem said.

German Finance Minister Wolfgang Schaeuble as saying there was no reason for a Euro crisis but that Italy urgently needed a functioning government.

Similarly, a spokesman for Chancellor Angela Merkel said she “took note with regret” of Renzi’s resignation but Germany would offer to work closely with the next Italian government

Beyond politics, economy has been resented. With Renzi’s defeat, ongoing plans to recapitalise one of the most indebted and largest Italian banks -Banca Monte dei Paschi of Siena- could be disrupted. Volatile trading in bank shares took place after the referendum outcome although it stabilised as of last Wednesday.

Renzi first had vowed to step down the day after the electoral consultation but he formally resigned on Wednesday as the Italian President Sergio Mattarella asked him. The 2017 budget had to be approved.

Beppe Grillo pushed Renzi for calling national elections “in a week” but a new government and prime minister will be appointed.

Joan Isus, Correspondent (Europe)