Spotlight: Italian PM resigns after defeat in crucial constitutional referendum

Italian Prime Minister Matteo Renzi on Monday announced his resignation after a defeat in Sunday's constitutional reform.

"My government clearly ends here," Renzi told a press conference on Monday. He said he would call a last Cabinet meeting in the afternoon and then hand his formal resignation to President Sergio Mattarella.

The most significant changes of the reform concern Italy's law-making process, parliament composition, and balance of power between the central government and the regions.

The major constitutional amendment proposed in the referendum was to cut the size of the senate to 100 from 315 seats, and strip it of the power to bring down the Cabinet with no-confidence sessions, and vote on national legislation. Currently, draft bills have to be approved by both houses in an identical text in order to become law.

With all the ballots counted, the reform was rejected with 59 percent of the vote, the Interior Ministry data showed Monday.

Almost two-thirds of the 50.8 million eligible voters cast their ballots, which was a very high turnout by Italian standards.

"The vote turnout exceeded expectations, and the No has won in an extraordinary clear way," the prime minister acknowledged.

"My best wishes go to the leaders of the No front, who will have the honor and the duty to submit new proposals," said Renzi, who took full responsibility for the negative outcome.

The proposed constitutional referendum is seen as a key test of popularity for Renzi's center-left government.

Renzi and his government had put full weight behind the reform, claiming it would help streamline Italy's laborious law-making process and increase political stability.

The country has had more than 60 Cabinets in the past 68 years.

The No camp, which is led by the populist Five Star Movement (M5S) and includes most center-right forces, leftist forces, and a minority of Renzi's own center-left Democratic Party, argued that the reform would have concentrated too much power in the executive branch.

The referendum was closely watched across Europe since the fall of Renzi's Cabinet might open the door to the rise of an anti-euro party and plunge the third-largest economy in the euro-zone into a new political crisis, and feed economic instability.

The rejection of the reform could be seen as another signal of the rise of populist forces in Europe, after Britain's referendum to leave the European Union.

On Monday the euro fell to a 20-month low against the U.S. dollar.

After Renzi's resignation, President Mattarella will have to consult party leaders in order to appoint a new prime minister and form another Cabinet, whose main task would be to draw a new electoral law. Endi