What Happens Next In Italy: Here Is Goldman’s Take

While the market overcame its initial scare following yesterday’s counter-establishment Italian referendum vote, and European stocks proceeded to not only make up all losses, but soar in the overnight session by the most since Trump’s presidential victory, what happens next in Italy is largely unknown. What follows are Goldman’s snap thoughts on the Italian next steps.
First, a quick recap of what has happened in yesterday’s referendum in which many more Italians than expected turned up to reject the proposed reforms, leading PM Renzi to announce his resignation later today. The odds of a general election have risen from one-in-five to one-in four, according to Goldman. Despite yesterday’s outcome, Renzi remains the most popular politician on the centre-left. More importantly, the outcome of the vote lowers the chances of a market-driven solution for the ailing Italian banks, and in turn increases the likelihood of a State-led restructuring Goldman notes.
Here are the details:
In a national confirmative referendum held yesterday, Italian voters rejected a Constitutional reform bill sponsored by the coalition government of Mr Renzi and passed by Parliament in April. The referendum was called because the bill had failed to receive the quorum of 2/3 of MPs in its final reading.

This post was published at Zero Hedge on Dec 5, 2016.

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