 "Matteo Renzi")
Italy's Prime Minister Matteo Renzi announced that he would be stepping down after losing a referendum on constitutional reform.
"My experience of government finishes here," Renzi told a press conference after the No campaign won what he described as an "extraordinarily clear" victory in the referendum on which he had staked his future.
But, what was this referendum all about? What did Matteo Renzi wish to pass and failed? Business Standard brings you a simplified explainer to what transpired in Italy leading to Matteo Renzi's resignation.
Italy is described as perfect bicameral, simply because both the house — the Chamber of Deputies and the Senate — have equal powers. Without the approval from both, no legislation can be passed. Seems fair. But the process is too lengthy and it takes too much time for Italian parliament to pass a law.
What was proposed?
Matteo Renzi proposed a reform that would make Senate lose almost all its powers. Also, the number of Senators would be reduced from 315 to 100. Had the reform been passed, then the major laws could have been passed by the Chamber of Deputies without consulting the Senate.
The Senate would only be left with powers to intervene on matters of constitutional reforms and treaties with the European Union.
The National Council for Economics and Labour, which is a consultative assembly of experts of the economic, social, and legal fields, representatives of public and private-sector producers of goods and services, and representatives of social service and voluntary organisations, was proposed to be abolished.
Provinces were proposed to be removed from the Constitution, except for the Autonomous Provinces of Bolzano and Trento. This would have lead to ordinary laws to abolish or radically reform them.
Who supported and who didn't?
The democratic party led by PM Renzi supported the reform. Big business corporations had supported the reform. Everyone else had been opposing, stating that it would give Rezni a little too much power.
How did it go?
In a 70 per cent voting turn out, 60 per cent did not support the proposed reform and the Renzi campaign failed.
Impact:
Investors and European politicians fear the 'No' camp's victory could cause political instability and renewed turmoil for Italy's banking sector, which has been hit by concerns over its huge exposure to bad loans built up during years of economic downturn.
Renzi's resignation represents a fresh blow to the European Union, which is struggling to overcome a raft of crises, and was eager for Renzi to continue his reform push in the euro zone's heavily indebted third-largest economy.
