EU Leaders assess impact of Italy's vote on European unity

(Vatican Radio) European Union leaders are assessing the impact of Italian Prime Minister Matteo Renzi's defeat in the Italian constitutional referendum on European unity and the euro currency. Germany's chancellor has expressed sadness, while other leaders tried to calm concerns that uncertainty after the Italian vote and the prime minister's resignation could weaken the euro. 

Listen to the report by Stefan Bos:

German Chancellor Angela Merkel told reporters that she regretted that Renzi resigned following the referendum. "I am sad that the referendum in Italy didn't turn out the way the prime minister wanted, because I have always supported 
his course of reform," she said.

Merkel explained that it was an Italian domestic decision. But she added: "From my point of view, we will continue our 
work in Europe and we have set the right priorities."

Merkel also welcomed Alexander Van der Bellen's victory over right-wing populist Norbert Hofer in Austria's presidential election.

However German Foreign Minister Frank-Walter Steinmeier said that Germany was watching the developments in Italy "with concern."

POLITICAL RISKS 

And an influential German business group, the Federation of German Industries, said it is worried about the potential risks to the economy and Europe's currency union posed by the outcome of Italy's referendum.

The head of the group of 19 countries that use the euro currency said however there is no need yet for "emergency steps" after Italian voters rejected constitutional reforms.

Eurogroup leader Jeroen Dijsselbloem said however that he had urged Italy's Finance Minister Pier Carlo Padoan to take the "necessary steps" to ensure that Italy's 2017 budget complied with EU rules. "After yesterday's referendum we will await the political developments in Italy. I spoke to him this morning and we agreed that at this juncture it's difficult for the Italian government to commit now to take additional measures," he said. 

"Therefore the Eurogroup invites Italy to take necessary steps in the nearby future to ensure that the budget will be compliant," Dijsselbloem added.  Dijsselbloem, who is also Dutch finance minister, insisted that the Italian vote against a reform by pro-EU Prime Minister Renzi doesn't mean that anti-EU forces will win in upcoming votes in France or the Netherlands.

However it has become clear that Europe will face a new period of political uncertainty.