NEW YORK (TheStreet) -- On Sunday, Dec. 4, Italians will vote to approve or reject Prime Minister Matteo Renzi's referendum to amend the Italian constitution. The proposed changes would shrink both the size and power of Italy's Senate and seek to create a more efficient and stable political system.

The looming vote could shift the balance of power in Italy's government. Renzi has threatened to step down should the "no" vote win. It also has significant implications on the world's oldest bank, Monte dei Paschi.

"Just be aware, this weekend is a much more important weekend," said TheStreet's Jim Cramer on CNBC's "Squawk on the Street" on Tuesday morning.

The vote this weekend threatens to destabilize Monte dei Paschi's plans to resurrect itself. Presently, the ailing Sienna-based bank is embarking on a plan to raise €5 billion ($5.3 billion) to combat its financial woes.

It will seek €1 billion from swapping certain bonds at 100% face value. The other €4 billion will be acquired through a capital increase through a share sale, according to The Wall Street Journal. 

A "no" vote could have significant negative ramifications for Italy's banking sector, as the current government is heavily backing the bank's recapitalization plan. A "no" victory on Sunday threatens to derail the project altogether.

"They are not ready for a bailout, if they need one," Cramer said. "They think that they have something, but the complications of their current scheme really put a lot of pressure on the stock."

Italian bank stocks are lower by 23% through Monday since the U.K. vote to exit the European Union.

"This is the oldest bank in the world. They are not going to let it go," Cramer contended. "But, they do have to dilute it big time."

"It will not close," he argued.

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