Italy’s referendum: Renzi’s big gamble failed. What’s next?

Following the outcome of today’s referendum, President Mattarella will do his best to avoid early elections. Any new caretaker government would easily take a full year to deliver a new electoral law and thus the baseline case remains for elections no earlier than the natural end of this parliamentary term in spring 2018, writes Lorenzo Codogno. The tail risks of Five Star Movement getting to power, a prolonged phase of political instability and/or Euro-exit remain very low probability events.