Italian Prime Minister Matteo Renzi and his center-left party suffered a raft of damaging defeats in local elections this weekend, losing ground to both the right-wing Northern League party and anti-establishment 5-Star Movement.
With 22 million Italians eligible to vote in seven regional elections and more than 1,000 municipalities, it was always possible that Renzi, who is trying to implement widespread – and some unpopular – structural reforms, could be vulnerable to his rivals.
While the votes were not yet fully counted Monday morning, projected election results by Italian news agency ANSA suggested that Renzi's Democratic Party (PD) candidates were ahead in the central regions of Tuscany, Umbria and Marche and the southern regions of Puglia and Campagnia -- where the center-left candidate was marginally ahead as of Monday morning - but the party had nonetheless conceded many votes to both the right and left.
Wolfango Piccoli, managing director of risk consultancy Teneo Intelligence, told CNBC Monday that the result was "much weaker than expected."
"Let's be very clear, the result is much weaker than expected and although it's not the disaster…it certainly is a set-back," he said, adding, "It is certainly a warning to Renzi and he cannot ignore that."
Early indications show that populist movements, such as the 5-Star Movement, which campaigns on an anti-euro and anti-establishment note and the Northern League party, which opposes immigration and the European Union and would like to see Italy's prosperous north break away from the more impoverished south, appear to have gained a chunk of votes.