What next for Europe after Italy’s referendum

On Sunday, Italians voted to reject the constitutional referendum promoted by former Prime Minister Matteo Renzi, who delivered his resignations on Wednesday after being roundly defeated.

As an Italian in the UK, after the results, sentiment surrounding the Yes supporters could very easy be compared to those of the Remain campaign and Clinton’s voters, although it was more similar to frustration than fear.

Right wing party Lega Nord and the populist Five Star Movement party, which campaigned for the No side of the constitutional referendum, are now calling for earlier elections to exploit the favourable momentum.

After Renzi’s resignations, his centre-left Partito Democratico now needs to find a unified strategy and, along with the anti-elitist global trend from Brexit to Trump, there might not be a better opportunity for the two parties to gain enough popular consensus to win earlier elections.

In the past years, Lega Nord and the Five Star Movement have been campaigning against the ‘European diktat’ and the euro, blaming bureaucrats in Brussels for the lack of improvements in the economy and widespread unemployment.

Matteo Renzi, who has been careful in following European directions, has not been able to showcase to his citizens the progress the country has made. Instead, he is described by the opposition as ‘Angela Merkel’s puppet’ and working solely for the big banks’ interests.

Renzi is often described as a young Berlusconi for his capacity to accommodate the interests of both centre-right and centre-left politicians. Nevertheless the comparison diametrically contradicts the level of public support they enjoyed domestically and internationally. Berlusconi is still able to find support within the country but has built himself a reputation of being unreliable on the international stage. As Prime Minister, Renzi struggled to find a sufficient amount of domestic backing but was able to promote his political tenure worldwide, as well as re-establishing international confidence and to maintain Italy in a situation of stability.

Following Renzi’s resignations, the fragile banking system is already showing some structural failures.

The unstable situation could be used by the EU to show that it is capable of flexibility allowing the Italian government to make a stance against ‘austerity’ in order to save its banks.

If the EU fails to do so, Lega Nord and the Five Star Movements will benefit from further popular discontent, thus bolstering the hypothesis of an ‘Italexit’.

Nowadays, Italian bank Monte dei Paschi di Siena is struggling to find private and foreign investors to contribute in its recapitalisation because of the uncertainties caused by the No win of the referendum, along with Renzi’s resignations.

If Italy anticipates its general elections in 2017, two out of six founding members of the European Union may select Eurosceptic leaders in the very short-term, with unknown consequences for the alliance.

In fact, along with the United Kingdom triggering article 50, in 2017 the European Union may witness the institutionalisation of the anti-elite discontent campaigned by populist and right-wing political parties. The specific weight of the countries involved has the potential to divide the organisation into two distinct blocs.

Carlotta Alfonsi is an account manager at Portland and previously worked at the Italian economic think tank Istituto Bruno Leoni. Federico Saleri has recently started at Portland and has a BA in Professional Communication for International Relations from Università Cattolica del Sacro Cuore in Italy.

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