Italian Premier Matteo Renzi speaks during a press conference at the premier's office Chigi Palace in Rome, early Monday, Dec. 5, 2016. Renzi acknowledged defeat in a constitutional referendum and announced he would resign on Monday. Italians voted Sunday in a referendum on constitutional reforms that Premier Matteo Renzi has staked his political future on. (AP Photo/Gregorio Borgia)

ROME (Reuters) - Italian Prime Minister Matteo Renzi vowed to resign after suffering a crushing defeat on Sunday in a referendum on constitutional reform, tipping the euro zone's third-largest economy into political turmoil.

His decision to quit after just two and a half years in office deals a blow to the European Union, already reeling from multiple crises and struggling to overcome anti-establishment forces that have battered the Western world this year.

The euro fell to 20-month lows against the dollar, with markets worried that instability in the euro zone's third largest economy could reignite a dormant financial crisis and deal a hammer blow to Italy's fragile banking sector.

Renzi's resignation could open the door to early elections next year and to the possibility of an anti-euro party, the opposition 5-Star Movement, gaining power in the heart of the single currency. 5-Star campaigned hard for a 'No' vote.

"I take full responsibility for the defeat," Renzi said in a televised address to the nation, saying he would hand in his formal resignation to President Sergio Mattarella on Monday.

Mattarella will have to embark on a round of consultations with party leaders before naming a new prime minister -- Italy's fifth in as many years -- who will be tasked with drawing up a new electoral law.

Early projections said Renzi managed to win little more than 40 percent of the vote on Sunday following months of bitter campaigning that pitted him against all major opposition parties, including the anti-system 5-Star Movement.

Italy's parties will now have to work together on the new electoral law, with the 5-Star urging a swift deal to open the way for elections in early 2017, a year ahead of schedule.

Opinion polls show Renzi's Democratic Party (PD) is neck-and-neck with the 5-Star, which has called for a referendum on Italy's membership of the euro currency.

Renzi, 41, took office in 2014 promising to shake up hidebound Italy and presenting himself as an anti-establishment "demolition man" determined to crash through a smothering bureaucracy and redraw the nation's creaking institutions.

Sunday's referendum, designed to hasten the legislative process by reducing the powers of the upper house Senate and regional authorities, was to have been his crowning achievement.

However, his reforms so far have made little impact, and the 5-Star Movement has claimed the anti-establishment banner, tapping into a populist mood that saw Britons vote to leave the European Union and Americans elect Donald Trump president.

In one relief for mainstream Europe, Austrian voters roundly rejected on Sunday a candidate vying to become the first freely elected far-right head of state in Europe since World War Two, choosing instead a Greens leader as president.

The biggest immediate loser from the 'No' triumph in Italy could be Italy's third-largest bank, Monte dei Paschi di Siena, which is bowed by bad loans and is looking to raise 5 billion euros ($5.3 billion) this month to stave off collapse.

Investors are likely to shun the operation if political chaos prevails, meaning a state intervention will be needed to save it. Several other lenders also need a cash injection to stay afloat, raising fears of a domino effect.

Economy Minister Pier Carlo Padoan, seen as a possible candidate to replace Renzi, sought to calm nervous markets on Friday, saying there was "no risk of a financial earthquake" if 'No' wins, though there may be "48 hours of turbulence".

A Nov. 25 Reuters poll suggested investors would expect to demand an extra 25 basis points in yield to hold Italian debt over its German equivalent if the reform is rejected, with the euro dipping 1.25 percent.

The risk to stability, meanwhile, is enough to have the European Central Bank preparing to step in if needed. </s> Italy's Prime Minister Matteo Renzi gives a press conference at the Palazzo Chigi on December 4, 2016 in Rome (AFP Photo/Andreas SOLARO)

Rome (AFP) - Italian Prime Minister Matteo Renzi announced his resignation on Monday, hours after it was confirmed he had suffered a crushing defeat in a referendum on constitutional reform.

"My experience of government finishes here," Renzi told a press conference, acknowledging that the No campaign had won an "extraordinarily clear" victory in a vote on which he had staked his future.

Interior Ministry projections suggested the No camp, led by the populist Five Star Movement, had carried the vote by a margin of almost 60-40 with a near 70 percent turnout underlining the high stakes and the intensity of the debate.

Markets seemed to take Renzi's departure in their stride. Stocks and the euro fell in early trading in Asia but there were no signs of panic with the possibility of his resignation having already been largely factored in.

Renzi said he would be visiting President Sergio Mattarella on Monday to hand in his resignation following a final meeting of his cabinet.

Mattarella will then be charged with brokering the appointment of a new government or, if he can't do that, ordering early elections.

Five Star founder and leader Beppe Grillo called for an election to be called "within a week" on the basis of a recently adopted electoral law which is designed to ensure the leading party has a parliamentary majority - a position Five Star could well find themselves in at the next election.

"Democracy was the winner," Grillo wrote in a post-vote blog that marked a significant change in the party's position on the electoral law. Prior to the referendum, Five Star had been arguing for it to be revised.

Most analysts see early elections as unlikely with the most probable scenario involving Renzi's administration being replaced by a caretaker one dominated by his Democratic Party which will carry on until an election due to take place by the spring of 2018.

Finance Minister Pier Carlo Padoan is the favourite to succeed Renzi as prime minister and the outgoing leader may stay on as head of his party - which would leave him well-placed for a potential comeback to frontline politics at the next election, whenever it is.

On the day Austria's voters rejected a far-right candidate for president, the scale of the No victory in Italy was even bigger than opinion polls had been indicating up until November 18, after which the media were banned from publishing survey results.

Renzi had gone into the final weekend of the campaign insisting he could still win voters around but he acknowledged he had failed. "The Italian people spoke today in unequivocal fashion," he said.

Opposition parties had denounced the proposed amendments to the 68-year-old constitution as dangerous for democracy because they would have removed important checks and balances on executive power.

Spearheaded by Five Star, the biggest rival to Renzi's Democratic party, the "No" campaign also capitalised on Renzi's declining popularity, a sluggish economy and the problems caused by tens of thousands of migrants arriving in Italy from Africa.

Renzi's backers believed they were voting for overdue change.

Outside a polling station in Rome, business owner Raffaele Pasquini, 37, told AFP he had voted "Yes" in the interest of his two-year-old son.

"We are voting to try and change a country that has been stalled for far too long," he said.

After the Brexit vote and Donald Trump's victory in the US presidential election, the No vote is likely to be interpreted as another victory for populist forces and a potential stepping stone to government for Grillo's Five Star.

But the campaign was not just about popular discontent with the state of Italy. Many Italians of a similar political bent to Renzi had deep reservations about the proposed changes to the constitution.

Under the proposals, the second-chamber Senate, currently a body of 315 directly-elected and five lifetime lawmakers, would have been reduced to only 100 members, mostly nominated by the regions.

The chamber would also have been stripped of most of its powers to block and revise legislation, and to unseat governments. </s> Il giorno della Reggenza: Stefano Palmieri e Matteo Ciacci i Capitani Reggenti per il prossimo semestre - Mattarella invia un messaggio per ribadire gli strettissimi legami con l'Italia.

, alle 13:10 circa, hanno assunto i poteri della suprema magistratura della Repubblica succedendo a Matteo Fiorini II ed Enrico Carattoni I.La cerimonia di insediamento – praticamente immutata nei secoli - è cominciata con l'. Alle 10, la prima apparizione pubblica dei Capitani Reggenti eletti, in abiti tradizionali, con l'ingresso nelladove, dopo il saluto da parte del Corpo Diplomatico e Consolare, il, ha pronunciato il discorso nella sua veste di decano, sottolineando la coincidenza con la Pasqua, comeed elogiando la storia della Repubblica di San Marino, sempre capace – nei secoli – di tenere alto il capo nella salvaguardia dei. In chiusura gli auguri citando Papa Fracesco: Capitani Reggenti eletti, nel loro discorso ufficiale , hanno rimarcato il, la difesa dei diritti umani, il percorso di sempre maggiore integrazione europea, intrapreso dalla Repubblica.La cerimonia è poi proseguita con ilche prima ha raggiunto Palazzo Pubblico – per l'incontro tra i Capitani Reggenti eletti e i Capitani Reggenti uscenti – poi,, officiata dal Vescovo Monsignor Turazzi e il ritorno a Palazzo Pubblico per il passaggio dei poteri, preceduto– sul tema della libertà.In aula, tra gli invitati,L'atto finale della sempre suggestiva cerimonia, lo scambio dei Collari di Gran Maestro di San Marino. Matteo Fiorini ed Enrico Carattoni hanno concluso il loro semestre,l.s. </s> Valletta (dpa) - Malta‘s Labour Party is heading towards a second mandate Sunday, with opposition leader Simon Busuttil conceding defeat within an hour of vote counting.



Prime Minister Joseph Muscat, 43, has seen off a challenge from Busuttil, 48, of the centre-right Nationalist Party, after a tense four-week election campaign. 



"It is clear that the people have chosen to stay the course," Muscat told the state broadcaster, shortly after initial counts showed his party leading by up to eight per cent. 



Official results are expected later Sunday. 



Voters cast their ballots for a new government on Saturday in snap parliamentary elections called by Muscat a year ahead of schedule amid a corruption scandal connected to the Panama Papers document leak.



Malta, the smallest member of the European Union with around 430,000 residents, holds the rotating presidency of the EU until the end of June.



Muscat‘s government has been in hot water as a result of the Panama Papers, a massive data leak out of the Panama-based law firm Mossack Fonseca in April 2016 that detailed how money was being funneled to shell companies in tax havens.



The leak revealed that Muscat‘s Chief of Staff Keith Schembri and former energy minister Konrad Mizzi owned secret companies abroad. 



Muscat says he called a snap election to eliminate economic uncertainty, but the opposition insists claims of corruption will not dissipate through a popular vote.



The Nationalist Party also produced documents that it claims show that Schembri received kickbacks from a controversial cash-for-passports scheme, while Mizzi is said to have benefited personally from a power station project.



Muscat, Schembri and Mizzi have strongly denied the claims.
Matteo Ciacci of Civic 10 and Stefano Palmieri of Future Republic take office of the Captains Regent of San Marino.