The Daily Update - Italy / Austria / New Zealand

The Italian Prime Minister Matteo Renzi has formally announced his intention to resign after losing yesterday’s referendum on constitutional reform, potentially tipping the Italian economy into political turmoil. As well as submitting his resignation to Italy’s President Sergio Mattarello, Renzi will also insist he would not be available to lead a caretaker government. Although many expected Renzi to lose the referendum, the size of the loss will surprise some commentators. With over 33 million Italians voting, more than two-thirds of those eligible, nearly 60% voted against a change to Italy’s constitution. In a speech after the vote, Renzi said ‘My experience in government ends here … I did all I could to bring this to victory’ adding  ‘If you fight for an idea, you cannot lose.’

Renzi’s decision to leave office only 2 and half years after being appointed means Italy will now not only  be looking for its fifth prime minister in as many years, but will also be felt across the European Union. The vote is the latest blow to establishment politics in favour of populist and anti-immigrant parties, following on from the Brexit vote and Trump's surprise victory. The biggest objection to the reforms was that it would have given the ruling party more power at a time when there was little faith in politics. On the back of the result the euro touched a 20 month low against the dollar (1.0506).

Also yesterday Austria voted for Alexander Van der Bellen an independent pro-EU president, beating Norbert Hofer of the anti-immigration Freedom Party. Voting for Norbert Hofer was also seen as an anti-establishment vote and there will be a sigh of relief at the result in the EU. As German Vice Chancellor Sigmar Gabriel put it ‘A weight has fallen from all of Europe's shoulders’ adding ‘the result of the election in Austria is a clear victory for reason against right-wing populism’.

Then, in a surprising move New Zealand Prime Minister John Key has resigned after 8 years in the job, believing that there was ‘no way’ he could have served a full fourth term. He told reporters ‘I don’t feel comfortable looking down the barrel of the camera and not being honest ... On a family basis, I don’t think I could commit much longer than the next election’ adding  ‘Sometimes you’ve got to make hard decisions to make right decisions’.