Italy's Prime Minister Mattheo Renzi will resign following a big referendum defeat. It was a vote on constitutional reform, but was widely seen as a test of his personal popularity.

Italian Prime Minister Matteo Renzi speaks during a media conference after a referendum on constitutional reform at Chigi palace in Rome, Italy, December 5, 2016.
Italian Prime Minister Matteo Renzi speaks during a media conference after a referendum on constitutional reform at Chigi palace in Rome, Italy, December 5, 2016.

Italian Prime Minister Matteo Renzi is to resign on Monday after suffering a crushing defeat in a referendum over constitutional reform, tipping the Euro zone's third-largest economy into political turmoil.

Renzi will hand his resignation to Italian President Sergio Mattarella.

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.

Renzi's emotional, midnight resignation announcement sent the Euro lower and jolted stock and bond markets on concerns that early elections could follow, possibly paving the way for an anti-Euro party, the 5-Star Movement, to come to power.

TRT World's Sarah Morice brings the latest developments from Italy:

Source: TRTWorld and agencies