Monday, 5 December 2016

Italians vote down constitutional reforms, Renzi resigns

The Italian Prime Minister, Matteo Renzi, has resigned after Italians voted against his constitutional reforms by a wide margin.

Renzi had wanted to change the constitution to take most of the power away from the senate and hand it to the central government and to replace the directly elected members of the senate with appointments from regional assemblies. It would have made the Prime Minister and his government very powerful and upset the careful balance established by the post-facist era constitution whilst establishing the primacy of EU law in the Italian constitution. It's all a bit Blairite but that's hardly surprising as he has been compared to Blair since first rising to the top of the Italian Democratic Party.

With most polls counted the country is divided roughly 60/40 against the proposed constitutional changes on a 70% turnout and Renzi conceded defeat this morning. The Five Star Movement - UKIP's main partner in the EFDD group in the EU Parliament - is putting itself on a war footing in preparation for early elections next year but it is likely that the President (himself a member of the Italian Democratic Party) will appoint a caretaker government instead.

Italy's debt to GDP ratio is 133% which is second only to Greece amongst €urozone economies, their banks are teetering on the brink of collapse and unemployment is through the roof. This is a major cause for concern in the €urozone given that Italy is their third largest economy.