On Sunday, Italy voted against constitutional reform. Soon after, the country’s prime minister, Matteo Renzi, resigned tossing Italy into further political chaos and resulting in the tumble in the currency markets. Read on to find out more about the central characters in Italy’s 63rd government change since WWII…
Wall Street stock futures fall after #ItalyReferendum: https://t.co/SQr351okEL pic.twitter.com/deDZ97iVmx
— Reuters Business (@ReutersBiz) 4 December 2016
Renzi was the last great hope of the European Union’s leaders, and the only political leader who was said to have a “vision for Europe”. Renzi’s defeat could be the start of an anti-establishment “tsunami” that may spread to the Netherlands, Germany and France where general elections are due to take place early next year. Commentators have said it was a win for democracy, but a “slap in the face” for the establishment, which is ironic given that Renzi did not consider himself part of the so-called establishment.
The result of the poll, in which there was an approximate 70 percent turnout, produced a 60 percent vote against reform and 40 percent vote for reform, with the far right Northern League Party and the Eurosceptic Movimento 5 Stelle (Five Star Movement) calling for snap elections.
Is this an Italian version of Brexit?
Italians were voting on constitutional reform, not on Italy’s EU membership, so the two cannot be directly compared, but the outcome could have a significant effect on European relations.
Mr Renzi wanted to strengthen central government, simplify Italy’s political system and take control away from the Senate. His detractors, including the comedian, and head of the Five Star Movement, Beppe Grillo, saw it as a chance to vote against the establishment and their politics. It was a resounding victory for the “No” camp.
The BBC’s Europe Editor Katya Adler writes: “Italy wakes up on Monday to the threat of a banking crisis, political turmoil, and a group of anti-establishment populists banging on the doors of government. Eurozone beware and EU be warned.”
No wonder then that the euro fell against the dollar to its 20-month low of US$1.0505. However, by late morning it rebounded by 0.3 percent to US$1.0702 and the markets are said to be stabilising and not in panic mode.
