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Italy Analysis Eurozone Matteo Renzi

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Political instability as usual after Italy's referendum

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Italian Prime Minister Matteo Renzi announced his resignation after a referendum on constitutional reform in Rome, 5 December 2016. Reuters/Alessandro Bianchi

Italian Prime Minister Matteo Renzi announced he would resign Monday after voters rejected his proposals to reform the constitution in Sunday's referendum. While pro- and anti-Europeans respectively minimised and celebrated the impact, the result left the country in a familiar state of political uncertainty.


With a turnout of more than 65 percent, more than 59 percent of voters struck down Renzi’s plans to reduce the powers of the Senate in hopes of streamlining the legislative process.

In the end the referendum had less to do with rejecting the proposal than directing anger and frustration at Renzi and his government.

“The idea was ‘We believe you have failed, you promised things that you didn’t deliver, you have put yourself at the centre of everything, arguing that you are the solution to everything […], you are clearly not the solution to all our problems and, given that you are so visible, we can express our anger at you,’” says Giovanni Orsina, professor of contemporary history at LUISS University in Rome.

Although the referendum itself was not about Italy’s role and place in the European Union or its use of the euro currency, Eurosceptics inside and outside the country hailed the result as a victory.

Grillo calls for election within week

The campaign against the reform was spearheaded by the Five Star Movement, whose leader Beppe Grillo called for a snap election “within a week”.

Marine Le Pen of France's far-right National Front sent Italian voters her “congratulations on this victory”, while Nigel Farage, who was a prominent Brexit campaigner in the UK, said the vote looked "more about the euro than constitutional change".

While pro-European observers generally minimised the impact of the vote, German Foreign Minister Frank-Walter Steinmeier admitted it was “certainly not a positive contribution against the backdrop of the crisis in Europe".

“Matteo Renzi was a very pro-European political leader and now there is a big fear among pro-Europeans in Italy that the next prime minister might well be Grillo […], a declared anti-European who proposes holding a referendum on Italy’s exit from the eurozone,” says Alexander Trechsel, professor of political science at the University of Lucerne in Switzerland.

A return to uncertainty

In the shorter term, moving on from the referendum is complicated by a number of pending reforms that are in limbo until a new government is in place.

“The constitutional reform was supposed to come together with a new electoral law, but the constitutional amendment has been rejected, so the electoral law will also have to be amended and reviewed,” says Silvia Merler, a researcher at the Johns Hopkins School of Advanced International Studies and affiliate fellow at Brussels-based think tank Bruegel.

“There are also a number of important deadlines, like the budget law that has to go through parliament before the end of the year and also the banking sector situation that was supposed to be dealt with after the referendum and now there is uncertainly how that will be dealt with.”

The result marks a return to the uncertainty that has come to mark political life in Italy, where citizens are accustomed to the search for new governments and leaders.

“We have to find a new government, a new prime minister, and we must find a way to change the institutions and electoral law, so certainly we are heading towards a rather bumpy period,” says Orsina.

“Of course a Yes vote would have opened up a period of much greater stability and the possibility of doing economic reforms that might be delayed, because now politics and institutions come first,” he adds. “But this is what Italian politics has been about for a few decades, so I expect the country to find its way out of this.”