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| Italy referendum: 'Period of uncertainty' predicted after Matteo Renzi's defeat – live | |
| (35 minutes later) | |
| 9.39am GMT | |
| 09:39 | |
| The euro has rebounded from a 21-month low, clawing back almost all the ground it had lost overnight. Reuters has more: | |
| The single currency tumbled as much as 1.4% in Asian trade to hit $1.0505, its weakest since March 2015, as investors worried about increased political uncertainty in the euro zone. But by 0855 GMT it had recovered almost all of those losses, trading down 0.1% on the day at $1.0650. | |
| The result had been widely expected, though the size of the “No” vote, at with 59.1%, was more emphatic than had been forecast. | |
| “Because the vote was largely expected, there really isn’t enthusiasm to push the move too far,” said Societe Generale macro strategist Kit Juckes. “From here, FX will take its cue from (bond) spreads, the equity market reaction, and wait for rating agencies to opine.” | |
| Italy’s 10-year government bond yield shot up as much 13 basis points to above 2% soon after European bond markets opened, still below a 14-month high around 2.17% touched in late November. By 0855 GMT it was back below 2%, up 6 basis points on the day. | |
| European Central Bank sources told Reuters last week that the bank was ready to step up purchases of Italian government bonds temporarily if the referendum result were to spur a sell-off, but traders said on Monday that they had seen no evidence of the ECB in the market so far. | |
| The ECB holds its next policy meeting on Thursday. “(The result) has marginally increased the likelihood of a crisis like in 2011 or something, but even a full-blown crisis ... is not in itself something that is a meaningful burden for the euro,” said Commerzbank’s head of currency strategy in Frankfurt, Ulrich Leuchtmann, referring to the spiralling of Italian borrowing costs five years ago. | |
| “The only thing that would be a big burden (for the euro) is if the ECB reacts to it with more expansionary monetary policy, but ... Italian government bond spreads have reacted relatively benignly at the moment, and therefore it’s relatively unlikely that the ECB will do anything big.” | |
| Some analysts said the euro was drawing some support from Sunday’s presidential election in Austria, where voters roundly rejected Norbert Hofer, the candidate vying to become the first freely elected far-right head of state in Europe since World War Two. | |
| Our Business Live blog has the latest: | |
| 9.27am GMT | |
| 09:27 | |
| Lee Hardman, currency analyst as the Japanese finacial service company MUFG, says the relatively mild reaction on the markets reflects the irony that a no vote actually limits the risk of anti establishment parties gaining power in Italy. | |
| He said: | |
| “By rejecting the constitutional reforms, the Senate will retain it powers acting as a counter balance to the Chamber of Deputies. | |
| “The system of checks and balances reduces the risk of an anti-establishment party like the Five Star Movement gaining power and being able to call a referendum on the euro. | |
| “The current updated electoral law, which favours majorities in the Chamber of Deputies but is based on more proportional rules in the Senate, also makes it difficult for the Five Star Movement to govern by favouring political fragmentation. | |
| “The award of a majority premium of seats to the most popular party in the Chamber of Deputies will be challenged in court, and the law is likely to be changed under a potential caretaker government to make it favour more the formation of coalitions rather than one party rule which would make it even more difficult for the Five Star Movement to govern. | |
| “The difficulty the Five Star Movement faces in coming into power is one of the reasons why the negative euro reaction has been more modest than some have feared.” | |
| 9.21am GMT | |
| 09:21 | |
| Leading Ukippers are in a jubilant mood. | |
| Let's be clear: Italy has voted against the EU. Soon, there may no longer be an EU from which to Brexit. | |
| Has Nick Clegg called for a second referendum in Italy yet? | |
| I really think Italy needs to leave the eurozone to prosper again. Hoping today's referendum will speed that day. | |
| But Brexit-backing Conservative MEP Daniel Hannan predicts that Italy won’t be leaving the Euro. | |
| Unfortunately, I suspect Italy will keep the euro - despite, to a single approximation, not having grown since it joined in 1999. | |
| 9.12am GMT | |
| 09:12 | |
| Daniele Caprera, the UK spokesman for the Five Star Movement (M5S), has repeated his party’s opposition to Italy’s membership of the Euro. | |
| He was asked on the BBC Radio 4’s Today programme if the M5S would hold a referendum on Euro membership if it gained power. | |
| He said: “The Euro is a problem for Italy right now and we would like to get people’s voice on that. The Euro is damaging the Italian economy and Euro isn’t good enough for Italy right now.” | |
| He dismissed talk of a global populist wave sweeping governments power as a “media agenda”, adding “this is mostly an Italian problem”. | |
| Caprera added: “There is already a crisis in the EU. The current European system doesn’t meet the European people’s needs. It is more of economic system. It doesn’t help socially any of the problems that there are in Europe with immigration, and financial problems. Europe right now is being used to bring in cheap labour, to lower everybody’s salary. It is not a very good system.” | |
| Asked if M5S was on the brink of power, Capera said: “I think so. We are very credible. We want to change Italy. We want to participate in Europe but we need somebody who will listen. So far they have failed ... All they have been focused on is economics and austerity.” | |
| 8.55am GMT | 8.55am GMT |
| 08:55 | 08:55 |
| Sandro Gozi, Italy’s secretary for European affairs, says the project of European unity has lots a key player following the resignation of Matteo Renzi. | Sandro Gozi, Italy’s secretary for European affairs, says the project of European unity has lots a key player following the resignation of Matteo Renzi. |
| Interviewed on BBC Radio 4’s Today programme Gozi was asked whether the no vote represented the beginning of Europe breaking apart as he warned before the vote. | Interviewed on BBC Radio 4’s Today programme Gozi was asked whether the no vote represented the beginning of Europe breaking apart as he warned before the vote. |
| He said: “The beginning of Europe’s disintegration started with Brexit and it is up to the other 27 governments to relaunch Europe. That was our policy, that was our goal as the Renzi government. It is clear that Europe now loses a major political actor to its relaunch.” | He said: “The beginning of Europe’s disintegration started with Brexit and it is up to the other 27 governments to relaunch Europe. That was our policy, that was our goal as the Renzi government. It is clear that Europe now loses a major political actor to its relaunch.” |
| Gozi accepted the referendum result will lead to political instability in Italy, but not financial uncertainty. | Gozi accepted the referendum result will lead to political instability in Italy, but not financial uncertainty. |
| He said he did not see any risk to financial stability, but added there were “big questions” now over the reform project in Italy. | He said he did not see any risk to financial stability, but added there were “big questions” now over the reform project in Italy. |
| Gozi said: “It is clear that it was reformers against us: conservative camps, which was a mixture of has beens, many former prime ministers and the populists from the extreme right of the Northern League and the Five Star Movement. | Gozi said: “It is clear that it was reformers against us: conservative camps, which was a mixture of has beens, many former prime ministers and the populists from the extreme right of the Northern League and the Five Star Movement. |
| He added: “It is clear that politically we are in a period of uncertainty. And it clear that the coalition of ‘no’ is coalition of resistance to political change. This is the big question on which we have to work in next days and months.” | He added: “It is clear that politically we are in a period of uncertainty. And it clear that the coalition of ‘no’ is coalition of resistance to political change. This is the big question on which we have to work in next days and months.” |
| 8.34am GMT | 8.34am GMT |
| 08:34 | 08:34 |
| Our Rome correspondent Stephanie Kirchgaessner warns against over interpreting the results from a binary choice. She points out that many of those who voted no are also bitterly opposed to the far right Northern League and the anti-establishment Five Star Movement. | Our Rome correspondent Stephanie Kirchgaessner warns against over interpreting the results from a binary choice. She points out that many of those who voted no are also bitterly opposed to the far right Northern League and the anti-establishment Five Star Movement. |
| There are no voters who were opposed to changes to constitution, and nothing else. Now they're aghast at being linked to Grillo + Salvini | There are no voters who were opposed to changes to constitution, and nothing else. Now they're aghast at being linked to Grillo + Salvini |
| 8.17am GMT | 8.17am GMT |
| 08:17 | 08:17 |
| Follow the jittery reaction in the markets on the Guardian’s business blog. | Follow the jittery reaction in the markets on the Guardian’s business blog. |
| 8.04am GMT | 8.04am GMT |
| 08:04 | 08:04 |
| Has Renzi become the latest victim of the global rise in populism? Leading analysts differ. Richard Haas, president of the Council on Foreign Relations, says the result is ominous for western democracies and shows the current difficulty of governing from the centre. | Has Renzi become the latest victim of the global rise in populism? Leading analysts differ. Richard Haas, president of the Council on Foreign Relations, says the result is ominous for western democracies and shows the current difficulty of governing from the centre. |
| Italian voters didn't just say no but hell no. Further evidence of how hard it is to govern from center. Ominous for western democracies. | Italian voters didn't just say no but hell no. Further evidence of how hard it is to govern from center. Ominous for western democracies. |
| But FT editor, Lionel Barber, advices against generalising from the result pointing to the particular problems facing Italy. | But FT editor, Lionel Barber, advices against generalising from the result pointing to the particular problems facing Italy. |
| Health warning: Renzi is no victim of populist uprising: Italy has not been growing for two decades and referendums are protest vehicles | Health warning: Renzi is no victim of populist uprising: Italy has not been growing for two decades and referendums are protest vehicles |
| 7.55am GMT | 7.55am GMT |
| 07:55 | 07:55 |
| Leave.EU, the pro-Brexit campaign funded by former Ukip donor Arron Banks, has welcomed the Italy referendum result and hopes it will lead to Italy leaving the Euro. | Leave.EU, the pro-Brexit campaign funded by former Ukip donor Arron Banks, has welcomed the Italy referendum result and hopes it will lead to Italy leaving the Euro. |
| The wave of people power has spread to Italy as voters force the resignation of PM Renzi. Next step: quit the Euro!https://t.co/p4Zmg7EeRQ pic.twitter.com/XoiIhMWT2b | The wave of people power has spread to Italy as voters force the resignation of PM Renzi. Next step: quit the Euro!https://t.co/p4Zmg7EeRQ pic.twitter.com/XoiIhMWT2b |
| Updated | Updated |
| at 7.56am GMT | at 7.56am GMT |
| 7.48am GMT | 7.48am GMT |
| 07:48 | 07:48 |
| French president, François Hollande, says he respects the decision of Matteo Renzi to resign. In one of the first reactions from a fellow world leader, Hollande paid tribute to Renzi’s courage and dynamism. | French president, François Hollande, says he respects the decision of Matteo Renzi to resign. In one of the first reactions from a fellow world leader, Hollande paid tribute to Renzi’s courage and dynamism. |
| Hollande, who last week announced he would not be contesting next year’s presidential race in France, said he shares Renzi’s desire to steer Europe towards jobs and growth. | Hollande, who last week announced he would not be contesting next year’s presidential race in France, said he shares Renzi’s desire to steer Europe towards jobs and growth. |
| In a statement from the Élysée Palace he said he hoped Italy could rebound from the current situation. | In a statement from the Élysée Palace he said he hoped Italy could rebound from the current situation. |
| .@fhollande prend acte avec respect de la décision de @matteorenzi de démissionner à la suite du résultat négatif du référendum en Italie pic.twitter.com/XmqiiHLLvM | .@fhollande prend acte avec respect de la décision de @matteorenzi de démissionner à la suite du résultat négatif du référendum en Italie pic.twitter.com/XmqiiHLLvM |
| 7.28am GMT | 7.28am GMT |
| 07:28 | 07:28 |
| Matthew Weaver | Matthew Weaver |
| What eurozone crisis? asks Politico Europe as it urges its readers to stay calm. In its daily Brussels Playbook briefing it says all the talk of crisis is just talk ... for now: | What eurozone crisis? asks Politico Europe as it urges its readers to stay calm. In its daily Brussels Playbook briefing it says all the talk of crisis is just talk ... for now: |
| It’s nearly impossible for a solvent country to leave the euro, and the number of savers with more than €100,000 in fragile banks is very small indeed. While the euro dipped (before rallying) to $1.05 when No emerged victorious, it borders on voodoo-economics to equate small currency movements with fundamental economic strength or weakness. | It’s nearly impossible for a solvent country to leave the euro, and the number of savers with more than €100,000 in fragile banks is very small indeed. While the euro dipped (before rallying) to $1.05 when No emerged victorious, it borders on voodoo-economics to equate small currency movements with fundamental economic strength or weakness. |
| Reality check: Italians voted to reject change. Leaving the eurozone is the biggest change imaginable and wasn’t on the ballot. Renzi’s resignation is no earthquake: Italy will have its 65th government since 1945 — it’ll likely manage. Not that the future looks pretty: The country’s inability to reform and move forward has seen it grow at an average of just 0.6 percent each year since 1960. | Reality check: Italians voted to reject change. Leaving the eurozone is the biggest change imaginable and wasn’t on the ballot. Renzi’s resignation is no earthquake: Italy will have its 65th government since 1945 — it’ll likely manage. Not that the future looks pretty: The country’s inability to reform and move forward has seen it grow at an average of just 0.6 percent each year since 1960. |
| Analysis from Stefano Stefanini: The former diplomat and current La Stampa columnist advises Playbook readers that while Europe is concerned about Italy this morning, Italy is anxious about the post-Renzi government, not the euro. In the medium term, Italy now joins France at the top of the list of 2017 electoral worries. That doesn’t leave Angela Merkel in the clear: she’ll be called upon to help save the EU by helping to save Italy’s political centre. | Analysis from Stefano Stefanini: The former diplomat and current La Stampa columnist advises Playbook readers that while Europe is concerned about Italy this morning, Italy is anxious about the post-Renzi government, not the euro. In the medium term, Italy now joins France at the top of the list of 2017 electoral worries. That doesn’t leave Angela Merkel in the clear: she’ll be called upon to help save the EU by helping to save Italy’s political centre. |
| Updated | Updated |
| at 7.51am GMT | at 7.51am GMT |
| 7.05am GMT | 7.05am GMT |
| 07:05 | 07:05 |
| Italy, Austria and more: what we know so far | Italy, Austria and more: what we know so far |
| Claire Phipps | Claire Phipps |
| Italy | Italy |
| My experience in government ends here … I did all I could to bring this to victory. If you fight for an idea, you cannot lose. | My experience in government ends here … I did all I could to bring this to victory. If you fight for an idea, you cannot lose. |
| Austria | Austria |
| small global turning of the tide in these uncertain, not to say hysterical and even stupid times. | small global turning of the tide in these uncertain, not to say hysterical and even stupid times. |
| It doesn’t fill me with joy when someone meddles from outside. | It doesn’t fill me with joy when someone meddles from outside. |
| Meanwhile | Meanwhile |
| Updated | Updated |
| at 7.07am GMT | at 7.07am GMT |
| 6.51am GMT | 6.51am GMT |
| 06:51 | 06:51 |
| Italy’s Sky TG24, citing pollsters Quorum, says younger voters opted overwhelmingly for no, by 81% to 19% among 18- to 34-year-olds. | Italy’s Sky TG24, citing pollsters Quorum, says younger voters opted overwhelmingly for no, by 81% to 19% among 18- to 34-year-olds. |
| For the 35-54 age group, 67% chose no, with 33% ticking yes. | For the 35-54 age group, 67% chose no, with 33% ticking yes. |
| It was only among the 55+ voters that a majority went for yes, by 53% to 47%. | It was only among the 55+ voters that a majority went for yes, by 53% to 47%. |
| .@QuorumSAS per #SkyTG24: il #No stravince (81%) tra i giovani, il #Sì prevale solo di poco tra gli over 55 #SkyReferendum pic.twitter.com/zkyKlcPrsy | .@QuorumSAS per #SkyTG24: il #No stravince (81%) tra i giovani, il #Sì prevale solo di poco tra gli over 55 #SkyReferendum pic.twitter.com/zkyKlcPrsy |