The results of last night’s Italian Referendum are out and the ballots show that the No vote leads with 60%, whereas the Yes vote is only at 40%. The turnout was at 70%. The Italian Prime Minister, Matteo Renzi, has announced his resignation after his heavy referendum defeat concerning his proposal to reform the Constitution. It is now up to the Italian President, Sergio Mattarella, whether he will appoint a new replacement or hold elections.
What was the referendum about?
The Italian voters were asked if they approved the constitutional law calling to alter the Italian Constitution that would reform the complex political system. It would reduce the size of the Senate from 315 to 100 and would have made law-making a more speedy process. The former Prime Minister, Renzi, claimed it would improve Italy’s reorganisation and economic growth.
Why did Renzi lose?
Addressing his loss, Matteo Renzi said, “My experience of government finishes here”. “We tried, we gave Italians a chance to change but we didn’t make it,” he said. “I lost. I can admit it and I am sorry. I was not able to lead you to the victory. Good luck to us all,” he concluded.
Renzi’s opponents not only included members of other parties, but also people within his own party. They all believed that the referendum would mean that the Prime Minister would end up with too much power in his hands. The voters agreed. An opposition leader, Matteo Salvini, called the referendum “a victory of the people against the strong powers of three quarters of the world”.
The referendum was not only calling for a change in the Parliament, but also regarded as a chance to reject establishment politics.
How is the rest of the world reacting?
The Italian Referendum comes in hot pursuit of the victories of the UK’s Brexit and the US’s Presidential Elections. Across the globe, far-right parties are beginning to take the upper hand. Despite Norbert Hofer’s defeat in the recent Austrian Presidential election, other far-right wing leaders in Germany, France and Greece have secured great advantages.
The result is being viewed as yet another blow to the EU (after Brexit), however, it is not an indication that Italy will be following the UK’s outside the EU. The Northern League and Five Star may be opposed to the Eurozone, but not for the Italy’s EU membership.
German Finance Minister, Wolfgang Schaeuble, said that “there was no reason for a Euro crisis but that Italy urgently needed a functioning government”. However, Marine Le Pen, the leader of the Front National in France, tweeted: “The Italians have disavowed the EU and Renzi. We must listen to this thirst for freedom of nations.”
What has happened to the economy?
Overnight, the currency has toppled to a 21 month low, following the departure of Renzi. Both stocks and the euro dropped last night, but were raised by the morning. Nevertheless, the referendum could have more long term effects, as there have been growing concerns over the financial stability of the country.
What will happen now?
As Renzi announced his resignation after the final cabinet meeting, he will hand his position to the President Mattarella, who could ask him to remain in his position until Parliament has passed a bill due later in the month.
Early elections are thought to be quite unlikely, therefore it is possible that Mattarella may appoint a caretaker administration led by the former PM’s party until the next elections due in the spring of 2018. Pier Carlo Padoan, the Finance Minister is the favourite to succeed Renzi’s position of Prime Minister.