Matteo Renzi's heavy referendum defeat confirms that anti-establishment populism is the singular disruptive force in European politics.
This is the second time in six months a questionable decision by a prime minister to hold a referendum has plunged the continent into political and financial turmoil. Just like Britain's David Cameron after the shock Brexit vote, Renzi has chosen to resign rather than clean up the mess.
Sunday had begun on a hopeful note for Europe's political mainstream with Norbert Hofer of the anti-immigration and anti-Islam Freedom Party losing out in the Austrian presidential race. But any relief over the fact Austrians decided against electing Europe's first far-right head of state since World War II evaporated shortly after midnight as counting in Italy got underway.
A nationwide vote aimed at curbing the power of Italy's upper house and concentrating power in Rome was meant to create enough political stability for Renzi to implement the tough reforms needed to fix an economy that has lagged behind Germany, Britain and even France over the past decade. Instead, the young prime minister's decision to personalise the poll by pledging to resign if Italians voted "No" has backfired.
What should have been an important but mundane debate about streamlining the Italian political machine morphed into referendum on Renzi's premiership and, by extension, his support of the European Project. The result is a "third domino" crashing into the Western political establishment after Brexit and Donald Trump's shock US election victory.
The Italian situation is arguably the least dramatic of the three but it still has serious implications. First, it puts an end to the important political and economic reforms begun by Renzi when he assumed power in 2014. The fresh-faced PM had vowed to drag Italy "out of the swamp" by building a strong centre-left majority but his approval ratings fell away and any chance of meaningful structural reform is gone for the time being.
Second, it threatens plans to rescue Italy's embattled banking sector at a time when as many as eight lenders are believed to need some form external assistance. One bank in particular, the venerable Banca Monte dei Paschi di Siena, requires at least €5 billion in fresh capital and there are legitimate fears a period of prolonged political uncertainty will send investors running for the exits.
And third, the result threatens the fragile unity of a European Union already struggling to cope with an immigration crisis, terrorism and stubbornly low levels of economic growth. With an early election a possibility for the caretaker government that is likely to succeed Renzi, the result represents a gilt-edged opportunity for the Five Star Movement - a populist, anti-establishment party which has previously said it is prepared to call a referendum on Italy's membership of the euro.
Despite all this some of Europe's political establishment attempted to put on a brave face even before Renzi began his concession speech.
"The vote has been wrongly portrayed by some as a plebiscite on Europe," former Belgium Prime Minister Guy Verhofstadt posted on his Facebook page. Verhofstadt, who is the European Parliament's lead Brexit negotiator, argued ordinary voters were actually protesting against Italy's established political parties for failing to come up with "new ideas" to tackle Europe's economic woes or manage influx of asylum seekers from northern Africa and the Middle East.
"As long as these proposals are not on the ballot and politicians continue to play party political games with referenda, people will continue to vote 'no'," he concluded.
Verhofstadt is right to criticise established political parties from the left and right for mismanaging Italy's economy and public institutions for the best part of 30 years. But he is wrong to suggest eurosceptic sentiment played no significant part in the emphatic referendum defeat.
Almost all the issues that turned voters against Renzi can be sheeted home to Brussels. Many Italians feel the immigration crisis has has been particularly tough for Italy - whose southern shores are a popular entry point for boatloads of asylum seekers - because the EU has refused to pay for adequate border protection. Many also complain their nation's 12 per cent unemployment rate and a debt load of 132 per cent of GDP is a result of German-imposed austerity measures that has crimped domestic growth. Put simply, they felt abandoned by Europe.
The final stages of Renzi's campaign was an admission of this political reality. He spent the last few weeks trying to pick fights with Brussels in an attempt to prove his eurosceptic credentials to swinging voters.
Of course, this does not mean Italians will reject the EU outright if Five Star is able to present them with an in-out referendum in the coming years. It should be noted that Hofer in Austria blamed his defeat, in part, on the former leader of the UK Independence Party, Nigel Farage, who last week claimed a Freedom Party victory would automatically result in a referendum on Austria's membership of the EU. Farage's claim was wrong and apparently scared voters. Even in a country where 46 per cent of the population is prepared to back a far-right candidate, it seems there is not widespread support for ditching the EU altogether.
However, there is no denying the Italian result is a blow to the forces of liberal internationalism.
Eurosceptic populism is on the rise and will be difficult to counter for as long the eurozone struggles to generate meaningful economic growth. With general elections to be held in France, Germany and the Netherlands next year, Europe's political establishment should be very nervous indeed.
