A pager in the Corriere Della Sera is just out, putting some more light on the IT PM strategy.
And it is really market unfriendly if you ask me.
So, quickly Key points:
If the No wins: Renzi will refuse to accept to form a new Gov to make sure everyone (in Italy and in Europe) he is the only choice everyone has according to persons close to him. Then 2 choices: 1) He might consider to be back to the government but not before playing it very hard, and creating a prolonged political deadlock. THIS IS A WORST CASE FOR MARKETS 2) Padoan PM and Renzi back to head of the PD preparing new elections, with any reform momentum dead for months as the only goal for the Gov would be to form a new electoral law. From what we understand reading press option 1) is the preferred so far with Renzi telling to its close guard: "they will beg me to stay, because there are no other choices or alternative leader: they can only have 1 Gov". He also added that "Italy can't have a weak gov at the G7 in May...".
If the yes lose narrowly by 2/3%: Go as soon as possible to new elections. Guerini - the vice of Renzi saying yesterday that an new electoral law can be worked out very quickly and new elections could be as soon as this summer. However it could be much sooner if everything goes smoothly: Increasingly in the PD Party April 2017 is the target for early elections.
It match what Renzi said above....
Anyway you spin it: Uncertainty on Italy will be back..