Assessing the results of the referendum in Italy, many foreign media reported that the defeat of Prime Minister Matteo Renzi was pretty predictable. On the one hand, for many months polls sociologists have shown a significant advantage of the opponents of the government’s reform plan. On the other, Renzi obviously failed to unite more than half of the electorate.
Expert at the Friedrich Ebert Foundation and the Rome correspondent for Die Zeit Michael brown notes that Italian society is divided into three roughly equal parts: it is Pro-European supporters of the Democratic party of Renzi, the electorate of right-wing parties (“Forward, Italy” and “Northern League”) and joined the populist “five star Movement” opponents of the elite.
Thus, 40% support of the reforms Renzi correspond to the result of his party in the elections to the European Parliament and indicate the “ceiling” of his support. “The same 40%, which in 2014 marked the success of Renzi, now led him to disaster, writes brown. — His hope to be “postideological” and populist, taking the part of the electorate of the other two camps, the more I know the longer he ruled. An important reason is the effect of the financial crisis, which is felt in Italy today”.
American The Washington Post calls “amazing” victory of the moderate candidate over the ultra-right in yesterday’s elections in Austria, but the defeat of the plan Renzi. According to the publication, much will now depend on the elected President of Italy Sergio Mattarella candidacy of a new Prime Minister. However, the fact that in Italy the dismissal of the government does not mean early elections (planned to be held in may 2018), and the majority in Parliament the party of Renzi, the prospect of a takeover by populists of The Washington Post calls “undefined”.
The news of the defeat Renzi on the referendum in the French media was in the shadow of reports about the possible nomination for the presidency of the current Prime Minister Manuel Valls. Le Figaro noted that Italy is entering a period of political and economic uncertainty. “After the shock Brexit and the growth of populist movements across the continent’s third-largest Eurozone economy may be in the area of instability”, — stated in the article. Le Figaro suggests that the place of Renzi is a technical government, however, the name of its head is still unknown. Le Figaro considers it likely that the new Prime Minister could become Finance Minister pier Carlo Padoan.
Le Monde has published several variants of development of events after losing Renzi referendum. Among them, most likely the paper suggests the appointment of a technical office headed by Padoana or the President of the Senate Pietro Grasso. Technical the government must obtain parliamentary approval to the budget in 2017, and to change the electoral legislation. Le Monde writes that the reform of the electoral system could theoretically be delayed until 2018, what’s not to like “five star Movement”, which advocates for the holding of elections as soon as possible.
Bad news for financial markets
Economic Les Echos focused on the winner of the referendum — “Movement Five stars”, calling it the likely future ruling party. The newspaper recalled that the Movement in favour of a referendum on Italy membership in the Euro area, reducing taxes for small businesses, the creation of the state Agency for investment and enter basic guaranteed payments to citizens. Despite fears the world’s media for the fate of the Euro, Les Echos believes that the Euro zone is well prepared to face new shocks and does not expect catastrophic consequences for the European single currency after the referendum.
“Obviously, the Euro will be a major barometer of the attitude to the referendum”, — writes the British Financial Times. At the same time, the newspaper notes, after the referendum on Brexit and victory in the US Donald trump investors are ready to withstand another surge of political instability in the Eurozone. Given that in the Italian referendum will be followed by other potentially dangerous events: for example, elections in France in may 2017.
On Monday morning, the Euro fell to $1.05 and is at least more than a year and a half, from March 2015.
“This time, polls have finally made a mistake — but it’s bad news for financial markets,” said Bloomberg. The results of the referendum could lead to political instability at precisely the moment when political will is required to solve the problems of Italian banks, sinking under the €360 billion of “bad loans”.
First of all, we are talking about the oldest and one of the country’s largest banks Monte dei Paschi di Siena, which until the end you want to find €5 billion in capitalization. In the worst case, writes Bloomberg, the government will nationalize the Bank. In the best case (especially if the Prime Minister will be the Finance Minister, Padoan) Rome will succeed and to reassure investors, having overcome a period of instability, and to find a common language with the ECB, discussed the tools to rescue banks.
The reaction of politicians
French President Francois Hollande with respect to the decision of the Renzi to resign. Hollande also expressed hope that Italy will be able to find the strength to cope with the situation.
The leader of the French “National front” marine Le Pen on Twitter expressed satisfaction with the outcome of the referendum. “The Italians have expressed their opposition to Renzi and the European Union. We need to take account of this thirst for freedom of the peoples and their aspiration to protect”, — she wrote.
The TV channel France 2, former French Finance Minister and now European Commissioner for the economy Pierre Moscovici stated that he believes in the ability of Italy to get out of the crisis: “It is a stable country with an established system of power. I’m sure Italy will do it. Italy has one of the strongest economies, Italy is very stable, it is inextricably linked to Europe,” he said.
According to the former Prime Minister and former foreign Minister of Sweden Carl Bildt, from the side of Rienzi, it was “a huge mistake” to tie the referendum to his person and his government. “It is a mistake to consider the outcome of the referendum only through the prism of populism: after all, the previous head of government, Mario Monti and many others also opposed the reforms,” — said Bildt in his Twitter.