But with a critical national referendum on Sunday, the populist wave is now threatening to crush him and plunge Italy into a political crisis when the European Union is already reeling.

From Washington to Brussels to Berlin, fears are rising that Italy may be stumbling into its own "Brexit" moment. What should be an inward-looking referendum on whether to overhaul Italy's ossified political and electoral system has taken on much broader import. Financial analysts warn of a potential banking crisis, and pro-Europe supporters fear that a "no" vote in the referendum could accelerate the populist movement across the European bloc.

Italy is potentially the next domino to fall, partly because of the disillusionment of young voters.