Strengthened by a landslide victory in European elections, Italian Prime Minister Matteo Renzi said on Monday he would push economic and institutional reforms in Rome and promote his pro-growth agenda in Brussels.
More than 40.8% of Italy's 27.3 million voters cast ballots for the centre-left Democratic Party, almost double the 21.2% who chose the anti-establishment 5-Star Movement, the second-biggest party, according to a final tally.
Former premier Silvio Berlusconi's Forza Italia party scored a low 16.8% of the vote.
It was the best ever electoral victory by an Italian centre-left party. Europe's youngest leader, 39, was one of the few across the continent not to lose against Eurosceptic parties that swept to victory in elections for the European Parliament.
"Italy is in a position to put a decisive mark on the process that is now opening in Europe," Renzi told a news conference on Monday. "I consider this a vote of extraordinary hope for a country that has all the conditions to be able to change and that can invite Europe to change."
The scale of the victory in a country struggling to emerge from a three-year economic downturn gives Renzi legitimacy to tackle an ambitious programme of reforms laid out earlier this year after he staged a dramatic political coup that gave him control of an unwieldy coalition government.
Some observers say Sunday's success would allow Renzi to call snap national elections and consolidate his power in parliament, but he dismissed the idea, saying parliament should continue to its natural end in 2018.
Renzi will also have a stronger hand in Europe. Italy's Democratic Party will become the second-largest group in the Strasbourg-based legislature after Germany's centre-right bloc, and the biggest in the Party of European Socialists.
His victory also poses a challenge. With a strong mandate to reform, he now has few excuses for failing to deliver.
Shares in Italian banks rallied and the FTSE MIB outperformed other European equities markets after Renzi's triumph over the Eurosceptic 5-Star. Italian bond yields fell.
Italy's premier repeated his pledge to respect commitments to its European Union partners to keep the country's public finances in check, saying he would not be seeking to change budget rules but the overall "approach" to the economy.
Renzi wants Europe to focus more on policies that encourage growth and jobs, rather than austerity measures that have marked the continent's southern European economies for the past three years.
Given the slap in the face delivered to mainstream parties across Europe, he may find his peers more receptive.
Italy's rotating six-month presidency of the EU, which begins in July, gives Renzi a good platform to promote his agenda. But he faces a challenge convincing Angela Merkel, the only other major European leader to emerge stronger from the elections.
The fast-talking and telegenic Renzi, the former mayor of Florence, took power three months ago by forcing out his low-key predecessor Enrico Letta in a party coup.
In the run-up to the European election, Renzi cut income taxes for 10 million low earners and eased hiring rules for temporary workers in a bid to boost the economy, the euro zone's third-biggest, and lower high unemployment.
He has promised further tax cuts for businesses and households while cutting the country's 2-trillion-euro debt, and sweeping reforms of Italy's institutions including a new electoral law and the abolition of the Senate to streamline Italy's often slow lawmaking process.
Renzi heads a right-left coalition stitched together after the deadlocked 2013 national election. The New Centre Right (NCD), Renzi's coalition partner, won 4.4% of the vote, enough to stand on its own in the European Parliament after breaking away from Forza Italia last year.
The 77-year-old Berlusconi is serving a tax fraud sentence doing public service at an old people's home. Politicians from his party said his inability to campaign was the reason for his party's disappointing showing.
Renzi called on Berlusconi to renew his support for institutional reforms, and urged 5-Star lawmakers to consider backing them to avoid further alienating its electorate.
With unemployment at just under 13% and the economy struggling to emerge from recession, the election had been expected to see a strong rise in support for the 5-Star Movement of stand-up comic Beppe Grillo.
For Grillo, who fought tirelessly during a bitter campaign and who declared that he would win or give up politics, the result was a stinging defeat as he lost more than four%age points compared with last year's national ballot.
As the projections came in, there was a conspicuous silence from his camp with his popular blog flooded with messages from opponents mocking his confident predictions of victory.
Grillo posted Rudyard Kipling's poem "If" on his blog and thanked his 5 million voters but has yet to comment directly on the result. Still, his rowdy and unconventional movement is likely to remain a force in Italian politics.
(Editing by Alessandra Galloni and Mike Peacock)
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