As concern over the impact of a No vote in next Sunday's constitutional referendum in Italy prompted Europe-wide stock market losses on Monday – the Milan stock exchange closed 1.8 per cent down – the attention is now focusing on just how such a defeat might be handled.
The problem about this referendum is that it is very much the brainchild and political raison d'être of Italy's dynamic prime minister, Democratic Party leader Matteo Renzi.
The financial markets clearly are worried that a defeat for Mr Renzi would prompt a period of government instability, which in turn could have a negative impact on the Italian economy and, especially, its ailing banking system.
Mr Renzi himself has partly created this situation since he originally stated that he would resign if the referendum was defeated. He has not recently repeated the offer, instead attempting to shift the focus away from himself and onto the issues.
The fiercely Eurosceptic nature of three of the political forces opposed to the referendum, namely the Northern League, the Five Star Protest Movement (M5S) and Silvio Berlusconi's Forza Italia, also worry observers. The Northern League and the M5S both want to pull Italy out of the euro.
Renzi under pressure
Should the No vote win, it is not clear what Mr Renzi will do. He will be under huge pressure from the business establishment, from his own PD party, and from elements in other parties not to rock the boat by resigning.
Some commentators, however, argue that, having invested so much personal political capital in this referendum, Mr Renzi will have no option but to resign.
Italian media speculation yesterday suggested that the finance minister, Pier Carlo Padoan, might replace Mr Renzi in the event of a No vote.
Mr Padoan would represent a conservative choice, a safe pair of hands who would have the approval of both the European Commission and European business establishment.
With the vote still much too close to call, a surprise helping hand came Mr Renzi’s way on Tuesday from German finance minister Wolfgang Schäuble, someone ironically criticised by Mr Renzi because of his insistence on austerity policies:
“If I was Italian, and even if he does not come from my political family . . . I would hope for a success for Mr Renzi,” he said.