The smashing defeat of pro-EU oligarchies in the Italian constitutional referendum of Dec. 4 opens up a new phase in European politics and bears global implications. This is the third shock delivered by the worldwide revolt of the forgotten citizen against a political establishment responsible for an economic crisis and wars which are driving millions of people into poverty, despair and death. Not by chance, the highest percentages of the No vote came from southern regions, such as Sicily and Sardinia, which have the highest rates of youth unemployment and poverty levels, and from the northeastern region of Veneto, hardest hit by the post-2008 industrial desertification and a high rate of suicide among small industrialists.

With a voter participation of nearly 70% domestically (66% with voters abroad), Italians gave a lesson of wisdom by rejecting 60-40 a Constitutional reform dictated by the European Union and by investment bankers. If approved, the reform would have turned the Parliament into a mere executioner of dictatorial power, based not in Rome but in Brussels and Frankfurt (EU Commission and ECB). In fact, the introduction to the Constitutional reform bill states that its aim is “to exhaustively rationalize the complex multilevel system of governance, articulated among the European Union, the state, and local autonomies.” No less than four new Constitutional Articles established that EU law was on the same level as Italian constitutional law.

Now a turbulent new phase is to begin for Italy and the EU. Prime Minister Matteo Renzi resigned and State President Sergio Mattarella will have to mandate a new political figure or a technocrat to form a new government. The Lega Nord and M5S opposition parties have called for early elections, but there is still a large majority in the current Parliament to support a PD Prime Minister. Additionally, before new elections are held, a new election law would have to be approved, as the Constitutional Court has ruled that the current one is unconstitutional.

Moreover, it is difficult for Mattarella to dissolve the Parliament, when the budget law has still to be approved and the current banking crisis could get out of control.

The financial storm announced the vote in case of a Renzi defeat (Raffaele Jerusalmi, the CEO of Borsa Italiana, the Italian stock exchange, warned of “colossal short positions” on Italy, in expectation of a “No” victory) did not occur the day after. However, time is running for Monte dei Paschi di Siena and other banks which are expecting a solution for accumulated losses in ten years of depression and a EU-dictated “market solution” involving a bail-in for depositors is now more difficult than before. If the crisis precipitates it will spread contagion throughout the entire financial system.

Italy will shortly face a choice: either impose financial fascism or leave the euro and implement national emergency legislation, which include a Glass-Steagall financial reform and a large-scale plan for infrastructure investments and economic recovery, and that in cooperation with Chinas New Silk Road strategy.