Italian Referendum

Major Blow for Renzi

  • Why it matters

    Why it matters

    Italy’s rejection of the referendum on constitutional reform has seen the country thrown in the arms of populism and opens the door to further political and economic uncertainty.

  • Facts

    Facts

    • Italians rejected government plans to limit powers of the parliamentary upper house in a referendum Sunday.
    • Prime Minister Matteo Renzi was to submit his resignation Monday to President Sergio Mattarella.
    • With a turnout of 68.48 percent, the “No” side had 59.26 percent of the vote and “Yes” had 40.74 percent.
  • Audio

    Audio

  • Pdf
Italien hat über Verfassungsreform abgestimmt
Italian Prime Minister Matteo Renzi speaking after the failed referendum. Source: DPA [M].

The good news from Vienna was not enough to tip the scales in the other direction over here in Italy.

With a clear majority, Italian voters gave their prime minister the red card. The referendum on changing the constitution became a tribunal for Matteo Renzi. By a wide margin, the Italians voted against the reform and against him – that was evident from the first exit polls. The market reaction was not long in coming. Even before the final results were in, the euro fell on the Asian markets.

They are used to such situations in Rome: After all there have been no fewer than 63 governments since the end of the war.

Mr. Renzi himself knew it earlier, too. An hour before the polls closed at 11pm, news came from the seat of government that Mr. Renzi would face the press around midnight – to announce his resignation.

This puts an end to the reform path in Italy three years after the 41-year-old had attempted to set the euro zone’s third largest economy on a course of modernization. At first with momentum and success, then at an increasingly slower pace, while growth remained sluggish in the wake of a three-year recession.

Mr. Renzi’s defeat is not the end of the world. They are used to such situations in Rome: After all there have been no fewer than 63 governments since the end of the war. The Italian president will decide whom he will charge with the forming of a government and then there will be new elections next year. Markets, too, have already recovered from the initial shock.

As head of his party, Mr. Renzi will certainly be in the running again. But two bits of news show just how divided the country is: The extraordinary turnout in the vote and the fact that the youth voted against Mr. Renzi.

If the youth vote runs after the comedian Beppe Grillo and his Five Star Movement, Italy could quickly be heading down the slippery slope of populism. Lucky Austria.

 

To contact the author:krieger@handelsblatt.com

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