The financial markets will likely react negatively to a ‘no’ vote. Check out the chart below that displays Italian 10-year Government Bond Yields. As you can see, yields are increasing rapidly as worries build that the Italian population is going to vote against the establishment.
Volatility in the bond market should be expected given that over $13 trillion in sovereign debt, around the world, is trading with negative interest rates. At some point bonds will be revalued to reflect the risk that is steadily growing.
The Eurozone is extremely susceptible to financial market volatility because of the fragility of the monetary union and lacklustre economic conditions. In 2010 I stated that the European Union will likely collapse by 2020. At that time I mentioned that a common currency would not survive without a political union. To be clear, I was not suggesting that a political union should be formed. I do not like the idea of sovereign nations surrendering their sovereignty to an outside bureaucracy.
Every country has unique cultural differences and the differences equate to economic conditions that differ from country to country. The idea that a common currency can be shared amongst nations that are politically different will only lead to instability and societal unrest.
The Brexit vote was not enough to collapse the European Union because England does not use the Euro as their currency. If Italy or France, whom both use the Euro, decide to leave the Eurozone I believe that the European Union will cease to exist shortly thereafter.
Currently, there are too many nations with disenfranchised populations for the status quo to continue on as is. If a major nation such as Italy votes to leave the EU other nations will follow suit and the grand experiment will come to an end. Only time will tell.