Finance Minister denies that Italian referendum result has caused new financial crisis

The Euro fell to its lowest in two years this morning, but rebounded later in the day

Finance Minister denies that Italian referendum result has caused new financial crisis

Finance Minister Michael Noonan | Image: RollingNews.ie

The Finance Minister has denied there is a new financial crisis as a result of yesterday's referendum in Italy.

Prime Minister Matteo Renzi has resigned after his proposals were rejected - leading to fears of a snap general election.

Polls have shown that a protest group - the Five Star Movement - which wants to hold a referendum on taking Italy out of the Euro would enjoy big gains in a new election.

This morning the Euro reached its lowest in two years, over fears about the future of Italy's banking sector.

However, the single currency quickly recovered losses as the markets took the latest political development in their stride.

Michael Noonan said that the blip has already ended.

"When Mr Renzi resigned last night, I think it was expected once the referendum was lost," he explained.

"This morning the markets went down significantly on all fronts, but they recovered very, very quickly, and by midday they were back to where they were," he stressed.

He also suggested there's no fear of a crisis because the ECB's current president Mario Draghi used to be the head of Italy's central bank.