Eurosceptics Delight As Italy's Renzi Quits

Eurosceptics delight as Italy's Renzi quits

ROME, Dec 5, (APP - UrduPoint / Pakistan Point News - 05th Dec, 2016 ) - Italian Prime Minister Matteo Renzi prepared to hand in his resignation Monday after suffering a ruinous referendum defeat cheered by populist leaders but sparking fresh jitters in Europe.

"My experience of government finishes here," said a downcast Renzi after acknowledging a defeat of almost 60-40 percent over his constitutional reform bid, which threw the future of one of the eurozone's biggest economies into turmoil.

Renzi, 41, will meet President Sergio Mattarella later Monday to hand in his resignation formally after a final cabinet meeting. Mattarella will then be charged with brokering the appointment of a new government or, if he is unable to do that, ordering early elections.

The euro sank to a 20-month low and most Asian stocks also retreated as investors fretted over the effect the political instability could have on a long-running banking crisis in Italy, and the possibility of elections that could usher in anti-EU parties.

Italy's FTSE MIB stock index tumbled 2.0 percent at the opening before clawing back some ground, underperforming other European markets. Italian bond yields also rose slightly, reflecting investor nervousness.

However, traders were reassured in part by the result of Europe's other crucial vote this weekend, which saw Austria reject a populist, far-right candidate for president. And a market meltdown had also been avoided because "the next steps are far from clear for Italy and traders are not panicking yet", said Craig Erlam, senior market analyst at Oanda.

Nevertheless, Holger Schmieding, an analyst at Berenberg, said the risk that Italy could choose to leave the euro had increased with the referendum.