The Global Rage Against the Machine Continues
Italians voted in a record rate of turnout this past Sunday to reject recently proposed constitutional changes. Advocates of the changes, most notably Prime Minister Matteo Renzi, claimed their intents were to alter the Senatorial composition of Parliament, modify and simplify the legislative process, and reorient the federalist balance between the national government and the country’s 20 macro-regions. But to many political analysts, and the Italian people, the vote was about much more than that.
Renzi wanted to see changes that would reduce the number of elected members in the Senate from 315 to 95. He foresaw the Senate taking on an advisory role, only secondary to a lower house that would now be chiefly responsible for legislating. He envisioned the abolition of Italian provinces, transferring certain powers concerning civilian public works projects to the central government in Rome, and further abolishing a national council that advises the executive branch on issues of the economy and labor relations. As the results of the vote demonstrate, Renzi ultimately found himself surrounded by a constituency that disagrees with his idea of change.
While the referendum undoubtedly concerned the proposed constitutional amendments, it was just as much a vote on Renzi’s post. After all, Renzi’s ascent to his now three-year government was predicated on his promise to affect change. After laying tremendous support for the reforms, and gambling his political success on a failed referendum, he has failed to realize that favorable change. Italians feel strongly that he has failed to spur economic growth and that he has negligently dismissed the country’s cripplingly high levels of unemployment, especially among youth. By promising to resign if the constitutional referendum didn’t pass, he unwisely doomed his political career. Indeed, Mr. Renzi has announced that he will deliver his resignation to President Sergio Mattarella by this evening.
The results of the vote, however, aren’t necessarily surprising. Opposing campaigns sourced energy from the same anti-establishment and anti-globalization forces that have recently swept Europe. Far-right parties are seeing the greatest amount of parliamentary success since before World War II, and it is likely that this “No” vote will continue to bolster populist sentiments throughout the European Union. Countries that sought to mitigate the ideological consequences of Brexit are now facing this Italian referendum, alongside a growing National Front party prowess in France and even an Angela Merkel, once untouchable, dwindling to the forces of German rightists.
Now, such a vote creates the possibility for Renzi’s opponents to sway Italy, the E.U.’s fourth-largest economy, out of the Euro currency zone. This would have dangerous implications for Italy’s banking system, which many argue is already too fragile, and would frighten foreign investment. Admittedly, such an intense reaction would be unlikely. Exiting the single currency market would require a change to the country’s constitution and as this vote has demonstrated, such a vote is not necessarily easy to garner.
What’s next, then? Thanks to the high likelihood of such a result, investors had enough time to mend their portfolios to the results, prevent a tremendous hit to the Euro. Renzi’s administration is withdrawing, and the future of the country’s political regime most likely rests with either a new successor from the Democratic Party or a leader of the Five Star Movement. Italy’s immediate troubles are forming a new government, and perhaps staging immediate elections, but its future challenges are more consequential.
In such turbulent times, Italy can’t afford to sail with the wind. A founding member of the European Union, a G-7 economy, and one of the largest remaining stalwarts of the European community, its leadership and its people must choose the course that aligns best with the wishes of the people, but one that sits comfortably with continental interests as well. Often people quip that Italy has had 63 governments in the last 70 years. Perhaps with a reorganization of the government its future doesn’t have to resemble this unpredictable past?
