Premier Matteo Renzi has said he will resign if the reforms are rejected, and opposition politicians have vowed to press for a new government if voters reject the proposed constitutional changes.
The premier made no comment as he voted Sunday in Pontassieve, a Tuscan town east of Florence, along with his wife, Agnese Landini. He was to return to Rome to watch the outcome of the vote.
The risk of political instability in Italy, Europe’s fourth-largest economy, triggered market reaction before the vote, with bank stocks sinking and borrowing costs on sovereign debt rising.
Italy’s European Union partners were closely monitoring the vote, which fell on the same day as a presidential runoff in Austria, where left-leaning candidate Alexander Van der Bellen took an unbeatable lead in early returns against a right-wing populist.
The referendum in Italy aims to streamline Italy’s cumbersome lawmaking process by reducing the powers of the Senate, while also removing some key decision-making powers from regions.
Renzi has argued that the reforms dismantle bureaucracy and will make Italy more attractive to investors and will help him relaunch the country’s moribund economy. But his decision to tie the outcome to his political future turned the vote into a plebiscite on his leadership.
A headline in the Frankfurter Allgemeine Zeitung said Renzi’s “arrogance is his shortcoming,” noting that “Europe is at stake” in the vote. The Guardian newspaper noted that the referendum was among a series of votes in Europe that could “conceivably herald the end of the European project in its current form.”
Some political opponents were hoping to tap populist sentiment that has been gaining ground with the U.K. vote in June to leave the European Union and the U.S. presidential victory last month by billionaire political outsider Donald Trump.
More than 46 million Italians were eligible to cast votes while another 4 million were registered to vote abroad. The overseas votes were being tallied under guard at a warehouse outside of Rome.
A “yes” vote would strengthen Renzi’s 2 ½-year-old government, giving it impetus to complete its five-year term and time to prepare for elections in 2018, while a “no” vote would favor early elections sometime next year.
Three former premiers — Silvio Berlusconi, Massimo D’Alema and Mario Monti — have come out against the reforms for different reasons. Berlusconi has argued that it concentrates too much power in the premier, while Monti says the reforms don’t go far enough.
How the vote plays out politically is likely to depend on the turnout and the margin of the decision.
“If only 30% of eligible voters turn out, the result will hardly be influential,” the founder of La Repubblica, Eugenio Scalfari, wrote in a column Sunday.
By noon, more than 20% had voted, with 11 hours to go. The last constitutional referendums, in 2006 and 2011, registered turnouts of 52.5%and nearly 55%, respectively.
If voters reject the referendum, Renzi is expected to announce his resignation right away. But analysts say President Sergio Mattarella, whose job it would be to designate someone to form a new government, is unlikely to act until parliament passes a new budget law.