European Union

Don’t panic, the Italian Constitutional Referendum isn’t Brexit

Let us not lose sight that the default option, if the government loses, is the status quo

BY Beatrice Faleri | tweet BeatriceFaleri   /  15 November 2016

I doubt anyone outside Italy would be worried about the upcoming Italian constitutional referendum were it not for Brexit and Trump’s victory. After all, it is a vote on a very technical issue that has only become a defining matter of political contention because the Italian Prime Minister  decided to make it one. And yet, particularly after November 8th, much of the international press had expressed panic over the outcome of the December vote.

The story goes like this: the Italian Prime Minister Matteo Renzi has promised to resign if voters reject his party’s constitutional reform bill, yet the same political forces that have brought Trump to the White House and the UK (almost) out of the EU are against him. If Renzi is defeated, then the government could lose a vote of confidence which triggers a snap election, giving the 5 Star Movement, comedian Beppe Grillo’s populist opposition party, the chance of a majority. Banks collapse, Italy is taken out of the EU and Europe is yet again precipitated in chaos.

After this year’s political developments, I won’t rule anything out, but I don’t see this scenario as very likely.

A bit of context: the government currently in office – a centre-left coalition headed by Renzi since 2014 – has long been trying to pass a series of constitutional reforms which aim to reduce the costs of the political machinery, strengthen institutional stability, and resolve ambiguity between local and national authorities. Renzi’s government is not the first to attempt this task: the Italian constitution has been the object of much debate and proposed tweaking basically since its inception in 1946 – and yet no government so far has managed to successfully change it.

Determined to defy all odds Matteo Renzi and his number two Maria Elena Boschi, Minister for Constitutional Reforms, have been pushing the reforming bill since the beginning of the legislature, and eventually managed to get Parliament to pass it in 2015. Since only two thirds of MPs approved it, however, the final decision must be remitted to the public – hence the referendum. At the moment, polls are not looking good for Renzi and Boschi – although we all know polls mean next to nothing nowadays.

In the past few months, many have compared Renzi, who promised to leave office if he loses, to Cameron, and yet Renzi’s position couldn’t be more different. Whereas Cameron had no obligation to call the EU referendum – and therefore could not do anything but leave after his defeat – Renzi had no choice. For this reason, he could – and should – have avoided personalising the vote.

Renzi’s framing of the referendum as a vote of confidence in his government was at best irresponsible and at worst the reason why he will lose, depending on the strength of the anti-establishment sentiment among the Italian electorate. Threatening to resign if the referendum does not pass made it all about him, disincentivising voters to gather information on what his reforms are actually about

At some point in the past few month, Renzi’s team figured this out and tried to backtrack on the claims, but it might be too late to change the minds of those who will be voting in the hope of throwing him out. However, chances are that, in the likely case Renzi loses, he will stay on until 2018, citing pressure from Europe, and the need to maintain political and economic stability (another snap election would get Italy the 4th prime minister in 3 years, and land Italian banks in even hotter waters).

It is still possible that Renzi will go, but it does not follow that the apocalyptic scenario painted by some – and particularly by government officials, in a sort of ‘Project Fear Made in Italy’ – will become true.

First, Brussels won’t let further instability rock Europe, and Eurocrats will do everything they can for Italy not to become a source of trouble. Second, the ECB will stand ready to react at the smallest sign of a run on the capital-starved and fragile Italian banks. Third, even if Renzi resigns, even if a snap election is called (Italy has a history of ‘appointed’ governments), and even if the 5 Star Movement forms a government, they will have to pass yet another constitutional reform to allow citizens a vote on international treaties, if they wanted to take the country out of the EU.

And finally, the referendum ultimately does not change much. Yes, the structure of the Italian parliament might change, and yes, one tier of local authorities might be abolished. But let us not lose sight that the default option, if Renzi loses, is the status quo.

This is why it’s wrong and ridiculous for Boschi, and Renzi’s administration, to sternly reject public discussion on the consequences of their potential defeat. Speaking at Imperial College London on Sunday Boschi dismissed with a shrug a question from the audience about the government’s ‘Plan B’, and denied that there might be any ‘Trump effect’ before the vote.

This does not help the government’s cause, either in Italy or abroad. One would hope Renzi and Boschi had learned a lesson from the past few months, and realised that blind confidence of success does not bode well with a temperamental electorate – hubris, after all, is what undid Cameron in June and Clinton in November. At the international level, this attitude is not well-received. On the one hand, it legitimises fearful speculations, and thus cause further uncertainty which, regardless of the actual (minimal) impact of the referendum’s final outcome, can throw European markets in an unhealthy – and unnecessary – frenzy. On the other, it risks signalling that the government is really plan-less, which does not really help improving Italy’s reputation in the eyes of international partners – something Boschi claimed to care about.

To insist that the American election will not influence the vote is also extremely naïve; it is a sign of blindness towards the web of relations between political realities across the Atlantic, and towards the social struggles of that group of disenfranchised, anti-establishment voters who will determine the referendum’s outcome as much as they determined Trump’s victory. It is true that the ‘Trump effect’ can go both ways: it can embolden undecided voters to participate somehow in the new struggles of the working classes, or may lead principled electors to cast a vote for the sake of pragmatism, to maintain stability in Europe. But to simply deny, as Boschi did Sunday, that Trump’s election would be at all relevant only highlights the myopia of the Italian government officials.

Speaking to the Minster after the talk, I was assured that there is indeed a ‘plan B’, and that it is not advertised purely for political reasons. While this should be reassuring to an extent – as long as she wasn’t bluffing – Boschi’s optimism did make me worry that Renzi and his acolytes may have not realised how little leverage they have, and how much fear – misplaced or otherwise – the referendum is inspiring abroad. Making their post-referendum plan clearer will not harm Renzi’s government chances any more than its arrogant happy-go-luckiness is at the moment, and will have the added bonus of preventing the risk of further chaos in Europe.


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