Renzi's back-me-or-sack-me gambit was a spectacular political own-goal
One of the constants in European politics is the ever-changing state of Italian politics. Its unpredictability is always fascinating to watch. Any political system that has seen 63 changes of government since 1945 can be considered interesting to say the least.
Just as it was difficult to abolish the Seanad, so too has it proven difficult to radically reform the Italian senate.
The great American psychologist Abraham Maslow wrote extensively about political leadership. In essence, he said that any successful leader must be one of the crowd and also slightly ahead of the crowd in order to make progress on the political stage. For Maslow, the politician can never get too far ahead of himself. His writings from the 1960s throw up some particularly suitable lessons for Italian Prime Minister Matteo Renzi.
On a large turnout, the scale of Mr Renzi's defeat over the weekend was decisive. It cannot have been a surprise given his unpopularity and the very sluggish performance of the Italian economy. He promised two years ago in coming to office to get people back to work but over that time unemployment, youth unemployment especially, has grown. There are lessons to be learned from this.
Politicians who promise referendums need to be very aware of the consequences. Mr Renzi has now gone the way of Mr Cameron.
Mr Renzi's promise to 'back me or sack me' in the context of this latest referendum campaign was a spectacular mistake. A politician putting a gun to his own head is asking for trouble. As we know in Ireland, it is never about the substance of the referendum, other matters always intrude.
Mr Renzi totally underestimated the level of opposition to his proposal, which it seems was a step too far in centralising power in Italy, in what is in effect a federal system. But, crucially, 80pc of the 'political establishment' in Italy opposed his reforms - this was a victory for the elite.
The real question now is: will this referendum make much difference to the EU and the eurozone or is this just the usual melodramatic Italian politics playing out?
It's certainly a blow for a pro-European leader who was serious about reform. But it doesn't mean automatically that the Five-Star Movement is on the verge of coming into government in Italy with an In/Out EU membership referendum. Don't forget that the next official date for an Italian general election is 2018.
Despite Mr Renzi's political termination, prompting some to unwisely believe this to be yet another example of disruptive politics following on from Trump and Brexit, nobody should underestimate the setback for the far right in Austria with the election of a pro-European president.
It's not inevitable that the populists from the far right or far left will always win in the current political environment. Possible maybe, but certainly not inevitable.
The truth is that political and economic uncertainty will continue in the eurozone until the outcome of the French and German elections are known in 2017. For the centre to hold it requires that both France and Germany elect pro-European governments - something that looks possible in the French case even with the rise of Marine Le Pen. Until we see the outcome of both elections, economic turmoil on the stock and currency markets will continue.
The markets have responded calmly to the referendum result. The immediate effects of the Italian referendum result could well mean a slightly weaker euro, which from Ireland's perspective is not the worst outcome given the buffeting that our exporters and Border retailers have taken of late.
It also means that the European Central Bank (ECB) will have to continue with its quantitative easing programme, injecting yet more cash into the European banking system as investors look in vain for returns. We will know more on Thursday when the ECB issue its latest assessment on the eurozone.
The real problem for Italy, which could still cause contagion elsewhere, is the condition of their banking sector and especially the Monte dei Paschi Bank. Mr Renzi's defeat makes the resolution of this bank more difficult as the resolution process is now under the new European banking rules which require bail-ins and not bailouts.
The problem with this bank in Italy is that it has lots of small mom-and-pop type investors (close to 40pc of its shareholder base) who may be hit in a final EU resolution plan without finding adequate new money.
Are there too many Italian banks? Have they an exposure on non-performing loans and probably need more cash?
The answer to both of these is probably yes and a solution will have to be found, but in speaking to people here in Brussels there is no sense that this is Lehman Brothers all over again.
Meanwhile, in among all the turmoil some good news from the ESRI yesterday. It predicts average annual growth of 3pc for the next decade.
Imagine that, growing the Irish economy by more than one-third in a decade.
And that's without any promise to have another referendum!
Brian Hayes is a Fine Gael MEP for Dublin