On Sunday 4th December, Italian citizens have made their decision: The proposed constitutional reform won’t become a reality. On a very high 68 per cent turnout, 60 per cent of the voters refused the proposal, determining the end of Matteo Renzi’s government, who had vowed to resign in case of loss. The young Prime Minister -at least the youngest in Italy’s history- came into power tow years and a half ago after orchestrating a sort of internal party coup in 2014. He took advantage of a chaotic political situation and he managed to take over the place of the then-PM Enrico Letta.
Renzi formed the third non-elected government of the last two years. However, his energy and self-assurance won the confidence of Italians. His agenda echoed in some ways the Obama’s “yes we can” campaign to win the U.S presidency. He pledged, in fact, immediate reforms and the demolition of the old political system. It is undeniable that he, also, enjoyed significant victories during his brief mandate, such as the approval of a controversial Job Acts and the electoral law. Nonetheless, during this period he has not been able to get over Italy’s long-lasting political divisions and its continuing economic malaise.
During this government the economic performance of the country has not exactly seen meaningful improvements. The former Premier has been accused of failing to reboot the stagnant economic growth and decrease the unemployment rate, which has been vacillating between 11,4 and 11,7 per cent for the last 15 months, with youth unemployment rate at 36,4 per cent. Because of this, as many analysts and commentators pointed out, the victory of NO is clearly not an indicator of an anti-establishment sentiment, but rather one more signal of deep discontent coming from the largest part of the population, increasingly impoverished and without any hope of prosperity.
Concerning the consequences that this Referendum might have on the stability of the Eurozone, it is still too soon to draw any conclusion. It is true that in the aftermath of the vote the euro dropped on the markets against the dollar, however it quickly recovered its losses already on Monday. Moreover, the majority of the most prominent figures in Europe seem to agree that the Italian vote does not mean a risk for the European stability. During the Eurogroup Finance Ministers meeting, the German minister Schaeuble, said that there’s no basis to talk of the Italian Referendum triggering a “euro crisis”, echoed by the French minister Sapin, who insisted that the Italian referendum “is a question of internal politics. It wasn’t about Europe.”
However, despite this outcome is with no doubt a primarily internal matter, it is not helpful for the EU either. The popular discontent fuels populist and extremist parties across the country like the far right Lega Nord led by Matteo Salvini and the anti-establishment 5Star Movements. They can count on a relatively large portion of the electorate and both see the EU as the ultimate responsible of the Italian depressive economic situation. They also pledge for the end of the single currency and the re-establishment of monetary sovereignty.
In the mean time, five days after the vote, it is not clear yet what is going to be the next step in the Italian politics, everyone is calling for new elections but the ball is in the hands of the President of the Republic, who, according to the most recent updates, is not willing to concede new elections as long as the current electoral law is not revisited. He is likely to appoint a head of government with the support of the current majority or a new enlarged majority with the task to vote for a new electoral law, which has been recently declared unconstitutional. Given the complicated situation, a caretaker government could last between four or six months at best, and then Italians, maybe, will go back to the polls.