President asks Matteo Renzi to stay on until the end of the month

 
Oliver Gill
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Matteo Renzi previously announced his intention to step down yesterday after his referendum defeat (Source: Getty)

Italian President Sergio Mattarella has asked beleaguered Prime Minister Matteo Renzi to stay on in power until parliament has passed a budget bill later this month.

Matteo Renzi arrived at the Italian President's palace earlier this afternoon. He was expected to tender his resignation to the head of state following a disastrous defeat in yesterday's constitutional referendum.

The incumbent premier's budget, which includes raising pension and health spending as well as preventing an increase in sales tax, was overwhelmingly passed by the Italy's lower house at the end of November. The package of measures still needs to be agreed by Italy's Senate.

There is a deadline of the end of the year for both houses of parliament to pass the bill.

Read more: Italy's bond yields jump on Renzi referendum loss

Renzi put his political career on the line by supporting a raft of constitutional changes that included cutting the size and power of the Senate.

However, the 41-year-old was resoundingly defeated at the polls with 59 per cent voting against the changes.

Finance Minister Pier Carlo Padoan is one of the favourite to succeed him although there has not yet been any formal announcement. Other candidates include Senate president Pietro Grasso and transport minister Graziano Delrio.

It is also uncertain whether Renzi will continue as the leader of the Democratic Party – if he were to stay on he would likely be able to influence who takes his place.

Read more: Arrivederci: Italian PM Matteo Renzi quits after crushing referendum defeat

Nevertheless, despite the level of support against the reforms – which de facto were a vote of no confidence in the Italian premier – an early general election is thought to be unlikely.

It remains likely the President will appoint a replacement for Renzi from his Democratic Party, who would continue the role through to the next schedule election, due in early 2018.

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