Italy's center-Left Prime Minister Matteo Renzi vows to step down after voters rejected his plan to streamline government by reducing the parliament's upper house in size and power.

The front pages of Italy's main newspapers pretty much say it all.  "I take full responsibility for the defeat," Mr. Renzi said in a televised address.  He will hand in his resignation President Sergio Mattarella on Monday, who will hold talks with major party leaders before naming Italy's fifth PM in as many years. 

Aside from ending a period of relative calm in Renzi's two and a half years in office, the resignation jolted the European Union which is already reeling from multiple crises and struggling to overcome far right-wing rabble-rousers and nationalism.  Worries over the EU's third-largest economy sent the Euro down to a 20-month low against the US Dollar.  Economy Minister Pier Carlo Padoan - a likely candidate to replace Renzi - had previously warned that a "no" vote would result in 48 hours of financial rumbles, but "no risk of a financial earthquake".

None of this means Italy is careening towards leaving the EU like Britain; but it does set the stage for elections next year, and opens a window for insurgent parties to crawl through.  The anti-establishment 5-Star Movement campaigned hard against Renzi's referendum, and is already claiming that it is ready to govern in his absence.  5-Star is tied with Renzi's Democratic Party in recent opinion polls, and could win a national election under the two-round electoral system pushed through by Renzi last year.