Now give us a vote on the euro: Italy rocks Europe after referendum defeat for PM, writes ROBERT HARDMAN

Don't panic!' got here the determined cry down the European corridors of energy yesterday morning as EU leaders digested grim in a single day information from Rome: one other one bites the mud.

The revolving door was spinning as soon as once more on the Chigi Palace, official house of the Italian prime minister, as Matteo Renzi was evicted from workplace – solely to be invited again for a day or two.

Hours earlier, a surge of anti-establishment feeling had compelled Mr Renzi to resign after a referendum on constitutional reforms.

Final evening, nonetheless, President Sergio Mattarella invited him again for just a few days to oversee completion of the nationwide funds for 2017.

Matteo Renzi, pictured, was compelled to resign as Italian Prime Minister after a referendum defeat on constitutional reforms, however has returned to oversee the nationwide funds

'I'm doing it out of obligation,' mentioned Mr Renzi who's now anticipated to depart on the finish of the week.

Opposition calls mounted for the president to carry a common election reasonably than set up one more interim placeman. 

Proper now, any such ballot could be grim for the European established order given the power of anti-EU feeling right here.

Sunday's 60:40 margin of defeat – on a whopping 70 per cent turnout – was significantly larger than anticipated. 

Again within the outdated days, a thumbs-down from the Emperor's field on the Colosseum might hardly have been any clearer. 

With Brexit and Trump, the autumn of Renzi will now be engraved within the populist annals of 2016.

For essentially the most half, Rome stayed calm and carried on yesterday, although there have been scuffles between police and protesters exterior the Chigi Palace final evening. The markets held agency – for the second. 

Instability had already been priced in to the market. The Italian authorities modifications administration extra typically than the nationwide soccer crew; after two years on the helm, Mr Renzi, 41, nearly qualifies for an extended service medal.

But this referendum was an historic victory for an unlikely alliance of Italian events of all political persuasions who agree on little or no besides one factor: they're all extraordinarily fed up with the EU.

The departure of Mr Renzi, Italy's third unelected prime minister in a row, has left thousands and thousands of Italians demanding a common election to supply a frontrunner with real democratic legitimacy.

Protests and demonstrations exterior the Chigi Palace, pictured, have seen police become involved

As issues stand, such an election might very nicely return a majority of MPs who've pledged a referendum on membership of the euro – and, thus, the EU itself. 

With a number of of Italy's massive banks in a vital situation, the prospect of financial meltdown simply received worse.

This was, due to this fact, a dreadful consequence for the European challenge.

But, even earlier than Italy had completed breakfast, EU grandees had been despatched to pooh-pooh any notion of bother. Transfer alongside now, Signor. Nothing to take a look at right here.

'It doesn't actually change the state of affairs economically in Italy or within the Italian banks,' mentioned Holland's Jeroen Dijsselbloem, chief of the eurozone finance ministers' membership, as he arrived in Brussels for what everybody was decided to not name a disaster assembly. 

'The issues that we have now right now are the issues we had yesterday.'

Dangerous information? Nonsense, mentioned Germany's Wolfgang Schaeuble: 'There is no such thing as a motive to speak of a euro disaster and there's definitely no motive to conjure one up.'

No less than his boss, Angela Merkel, had the grace to acknowledge that she was 'unhappy' for Mr Renzi. 

Such an enthralling younger man in contrast with the oafish Silvio Berlusconi who used to deal with her like a waitress. 

'The referendum was a query on home Italian politics,' sniffed France's Michel Sapin. 

'Italy is a stable nation, anchored to the European challenge.'

Mr Renzi, centre, was defeated by a 60:40 margin, a lot larger than was anticipated

So far as a number of protest teams exterior the Italian parliament yesterday had been involved, Italy just isn't a lot 'anchored' as handcuffed. 

'Since we joined the euro, the whole lot has been devalued. All the things that we earn now's value half as a lot because it used to,' mentioned Nicola Tagliafierro, 45, a trainer and a part of a centre-Proper group known as Nazionalisti.

Their little band of demonstrators had come from throughout Italy. All echoed a really acquainted Italian criticism that the euro was value 1,500 lire when Italy gave up its outdated forex in 1999 whereas the equal price is now three,000 lire.

ITALIAN BANKS UNDER THREAT 

Fears are rising for Italy's banking system because the monetary sector reels from the resignation of Prime Minister Matteo Renzi.

Monte dei Paschi di Siena, the world's oldest financial institution, is preventing to boost £four.2billion from non-public traders to stave off collapse.

However that is more likely to be made more durable by the referendum consequence – and it's feared taxpayers might be compelled to plug the hole.

Yesterday, Monte dei Paschi shares fell four.2 per cent – persevering with a drop of greater than 86 per cent prior to now 12 months.

Kathleen Brooks of Metropolis Index mentioned: 'The chance is that traders lose religion, which triggers a run on the financial institution and a full-blown monetary disaster that begins within the forex bloc, however might emanate all over the world.'

Deutsche Financial institution boss John Cryan mentioned the Italian vote was 'a harbinger of renewed turbulence'.

Chuck in low-cost labour from Japanese Europe and report numbers of migrants and Italy is more and more fertile floor for populist events like 5 Star, the anti-capitalist Eurosceptic motion began by comic Beppe Grillo (at the moment accounting for 91 of the 630 seats within the Italian parliament). 

'The folks had been by no means given their say once we joined the euro. We are going to be certain they've a referendum now and, not like Britain after Brexit, we can have a plan both means,' mentioned Manlio di Stefano, a 5 Star MP and international affairs spokesman.

An IT engineer born in Sicily, he moved to Milan in quest of work. 'None of my pals at house had jobs!' he advised me. He added: 'I nonetheless love the European dream however it has been ruined by EU leaders … They're solely all in favour of monetary establishments and austerity, not folks.'

Whereas extracting Italy from the EU would make Brexit seem like baby's play – given its membership of a single forex which at the moment serves as a life assist machine – the thought is now not dismissed out of hand. 

'In the meanwhile, Italians would vote to depart Europe. Earlier than Brexit? No. However now, after Brexit? Properly it units an instance,' mentioned Gianno Zito, 53, from Rome.

Again on the Chigi Palace, post-war PM quantity 41 was getting ready to pack up his worldly items final evening when the president's name got here via. 

For now, he stays Prime Minister 41.5.

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