Italian Prime Minister Matteo Renzi quit in the early hours of Monday after voters decisively rejected his proposal for constitutional reform.



Here's an outline of the path ahead for Italy as markets awake to the results.



1. What happens Monday?



Renzi will hand in his resignation to President Sergio Mattarella on Monday afternoon. Mattarella's aim will be to establish whether a new coalition government can be set up or early elections must be called and he may ask Renzi to delay his departure to allow talks with the speakers of both houses of parliament and with party leaders.



The margin of Renzi's defeat is so big that he could also be forced out as leader of the Democratic Party.



2. Who could succeed Renzi?



Possible successors include senior Renzi allies such as Finance Minister Pier Carlo Padoan, Senate Speaker Pietro Grasso and Culture Minister Dario Franceschini. Renzi will remain nominally in power until the new prime minister has been sworn in.



3. What does President Mattarella want?



Stability. Mattarella never thought that Renzi needed to make the referendum a resigning issue, as the vote, on paper at least, was about reform and not the government's performance. The president's preference would be for a new government to last until early 2018 when the next elections are due -- but how long a caretaker administration can survive will depend on party leaders.



4. What do Renzi's rivals want?



The anti-establishment Five Star Movement wanted Renzi to quit, and now it wants immediate elections.



Five Star is running neck-and-neck with Renzi's Democratic Party in opinion polls for the first round of a general election and would win a runoff by 53 percent to 47 percent, a survey by EMG released Sunday showed. If it gets into government, the party is planning another referendum on whether Italy should stay in the euro area.



Ex-premier Silvio Berlusconi, leader of the center-right party Forza Italia, is eyeing a possible comeback, potentially as part of a new ruling coalition.



5. What is Italy's next priority?



Apart from forming a new government, the priority for mainstream political parties is reform of the electoral law. They are anxious to change the election system for the lower house, because the current system would automatically give a majority of seats to the leading party -- and that might turn out to be Five Star.



6. How are markets responding?



The euro fell to the lowest level since March 2015 as Renzi announced he would resign, though it pared losses by the end of his speech. The euro was 1 percent lower at $1.0560 as of 1:25 a.m. local time.



While a "No" vote was already priced into Italy's government bonds, yields could rise further as markets assess the risk of an early election, according to Nomura analysts including Jordan Rochester.



7. What does this mean for Italy's banks?



The political uncertainty following the referendum could complicate further Monte dei Paschi di Siena SpA's capital raising efforts. Italy's third biggest bank plans to begin selling shares this week to raise 5 billion euros as it also looks to dispose of 27.7 billion euros in bad debt.



"Many investors are now asking: How does Monte Paschi cover its capital increase?" said Vincenzo Longo, an analyst at IG Markets in Milan. Investors may balk at taking part in the offering which could prompt the state to step in or force the bank to delay its cleanup. This scenario could have a knock-on effect for other lenders such as Banca Carige SpA, a
Genoa-based lender under pressure from the European Central Bank to strengthen its balance sheet.