BELGRADE – Italian Prime Minister Matteo Renzi’s decision to resign after losing the referendum to amend the Constitution has set the European country on the road to election in 2017. The election may prove to be a semi-final year for the European Union (EU) with founding members Germany, France and Italy going to the polls with strong Eurosceptic and populist candidates in the running.
Italian voters overwhelmingly rejected changes to the Constitution that would have streamlined the legislative process. The vote was considered as a referendum on PM Renzi’s government that backed the change. The PM had said that he would resign after the vote. Many consider the outcome of the vote as another victory for anti-establishment movements in Europe. The euro fell as much as 1.5% against the dollar in Asian trading immediately after the vote, although it recovered most of its losses later.
PM Renzi sought reforms to reduce the Senate’s size and powers, curtail the power of Italy’s 20 states. The referendum would have changed 47 of the Constitution’s 139 articles and altered the balance of power between Rome and the country’s 20 regions. It also proposed that the Senate’s strength to be cut to 95 from 315 and that it plays a mostly consultative role. The ‘No’ camp, led by anti-establishment leader of Italy’s second-most popular party ‘Five-Star Movement’ leader and Rome Mayor Virginia Raggi, said that it would concentrate power in government in Rome.
The outcome of the vote is a bad news for Eurozone, as Renzi is the second European leader in 2016 to be toppled by the anti-establishment revolt after David Cameron in the UK. The anti-euro Five-Star Movement, led by Donald Trump admirer and comedian Beppe Grillo, called for a snap poll after the ‘No’ victory to push another referendum – on taking Italy (Europe’s fourth-largest economy) out of the Eurozone. Grillo has called for an “Italeave” referendum – a ballot measure that would allow the country to vote on whether it should abandon the euro as its currency. In France, polls predict that conservative party National Front’s Marine Le Pen will reach the 2017 election runoff on her anti-establishment platform, calling for a ‘Frexit’ and a ‘People’s Spring’.
Financial market analysts have suggested that a ‘No’ vote in Italy, France or Germany could ultimately lead to the destruction of the 19-country Eurozone.