Devaluation was not an option. So in 2011, unable to withstand pressure from France, Germany and the financial markets, he was replaced by a technocrat, Mario Monti.
Of all the advanced industrial democracies, in the great majority of countries moderate conservatives either lead the government or the opposition.
There may be greater willingness by Brussels to negotiate following populist successes in the European elections.
The vote split along geographic and political grounds; it is hard to see how any proper government can be formed between competing brands of populism.
Storming results for the Five Star Movement and the League pose big challenges to the established structure of Italian politics, to the EU, and to the left more generally.
Traditionally, a technocratic government would now steer the country through choppy waters. But this time that could lead to more instability.
The referendum was meant to be about constitutional reform. Instead, it’s become an anti-politics storm which could have wide-reaching consequences.