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Gold may be up in Monday AM ! (Italy referendum)

[Marine2]

More uncertainty in EU !

Italy referendum: Exit poll results suggest clear victory for 'No'

Polls called the vote for the No camp by a margin of at least 54 per cent to 46 per cent for the Yes campEarly results from the first exit polls of the Italian referendum suggest that voters have overwhelmingly rejected constitutional reform proposals on which Prime Minister Matteo Renzi has staked his political future.

Polls for national broadcaster Rai and the La7 television channel both called the vote for the No camp by a margin of at least 54 per cent to 46 per cent for the Yes camp, and by an average of between 56.7and 43.3 per cent.

Two other polls gave No a similar lead of at least 10 points.

As the polling booths shut at 11pm, the Interior Ministry's website put the voter turnout at 68.33 per cent, indicating that the final turn out could be more than 70 per cent.

The projected result was in line with what opinion polls had been indicating up until 18 November, after which the media were banned from publishing survey results.

After the exit polls were announced the euro immediately fell against the dollar, dropping to $1.0580 from $1.0625.

If confirmed, the result would represent a fresh blow to the EU which is struggling to overcome an array of crises and was eager for Mr Renzi to continue his reform drive in the eurozone's heavily indebted, third-largest economy.

Defeat could also prompt fresh market upset, especially in the banking sector which has lost almost half its value this year on the Milan bourse, hit by fears over its huge exposure to bad loans accumulated during years of economic downturn.

Mr Renzi conflated his centrist leadership with a "Yes" vote and has promised to resign if he loses, triggering political instability and risking plunging Italy’s already struggling economy into a fresh crisis. He has called for a press conference at midnight.

Populists the Five Star Movement, led by comedian and Donald Trump admirer Beppe Grillo, claimed the No position, portraying it as something of a protest vote against Mr Renzi's status quo.

Mr Renzi, who came to power two years ago aged just 39, aimed to streamline Italy’s political system so he can push through a major economic reform package. He wanted to reduce the number of senators and limit the senate’s power relative to the lower house of parliament.

He also wanted to reduce the political power of Italy’s regions.

Few dispute that economic reforms are necessary: the Italian economy has essentially gone nowhere for 16 years and unemployment is high at 11.5 per cent. With the exception of Greece, Italy has had the worst performance of any eurozone country since the 2008 financial crisis.

But any political reforms in Italy that have the effect of concentrating political power have, by law, to be put to a popular referendum. This is a legacy of the country’s painful history of a fascist takeover by Mussolini in the wake of the First World War.

In the event of a confirmed No vote and Mr Renzi's resignation, it is possible the Italian president, Sergio Mattarella, could appoint another prime minister and a “technocratic” government could keep the show on the road for a while.

But if new elections are called for early 2017 it’s conceivable that the Five Star movement could come to power. The party is currently on around 28 per cent in the polls, not far behind Mr Renzi’s Democratic party, which has a 32 per cent share.

If in power, Five Star has said it would hold a referendum to decide whether Italy should leave the eurozone.

In light of this, a victory for No could start a panic financial markets and traders assume the country is on a slippery slope to leaving the eurozone.

If the eurozone economy goes into another slump brought on by a fresh financial panic it will damage growth in the UK by depressing exports and domestic UK business investment. Unemployment would rise and living standards would fall.

The pound may well gain against the euro – which would be good for holidaymakers heading to the Continent – but the overall economic impact of a return of the eurozone crisis for Britons would almost certainly be negative.