Italy Analysis: Crying Wolf About the Break-Up of Rome and the EU

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PHOTO: Matteo Renzi, who resigned as Italian Prime Minister after losing a December 4 referendum on Constitutional reform


Daniele Albertazzi of the University of Birmingham writes for European Policy and Politics at the London School of Economics:


Within a few days of Matteo Renzi resigning his job as Italy’s Prime Minister, the country has a new government. This will be led by one of Renzi’s (and Romano Prodi’s) ex-ministers, Paolo Gentiloni. It is noticeable for how similar it is to the previous one, with most Ministers who had served under Renzi having kept their jobs.

Much more importantly, the governing majority has not changed and will be made up by the Democratic Party — that Renzi himself will continue to lead — plus some minor allies, with only one tiny group of Parliamentarians having moved to the opposition). Gentiloni will enjoy a slightly reduced majority, which will cause problems in the Senate; however, by bringing his own Democratic Party with him and by listening to its various factions, he should be able to govern for the limited period that his executive is expected to last (in the best case scenario until the spring of next year, but possibly less). As for Renzi, by remaining in charge of the Democratic Party, he will be able to exercise considerable influence on the government’s policies and strategy.

Gentiloni’s job is now to keep the Euro-sceptic Five Star Movement at bay and to be seen to do something about the deep-seated problems afflicting the country, such as sluggish economic growth, low productivity, dramatic youth unemployment, and the perilous state of some of Italy’s banks. This is, incidentally, what his predecessor in the job should have done, rather than investing so much time and political capital in devising a Constitutional reform that would not have improved Italian governance — a reform which ultimately failed to convince a clear majority of Italians, who rejected it in the referendum of December 4.

Given the speed at which events have developed in recent days, it is easy to forget that, in the period leading to the referendum, there were plenty of warnings by journalists and commentators. They explained that, if Italians decided to vote “no” to the proposed Constitutional reform, this would set in motion a chain of events possibly leading to the collapse of the Euro.

Crying wolf and predicting impending doom has become a bit of a Western pastime whenever there is an election or a referendum in Europe, following the UK’s decision to exit the European Union in June, and the upset caused by Donald Trump’s victory in the recent American election. But the consequences of such continuous dramatization — which helps sell advertising space, but makes for poor analysis — are rather obvious: voters’ exasperation with that same political class and media constantly talking of impending doom.

It is perfectly reasonable to support this or that mainstream candidate or this or that position in a referendum, but the reason that is put forward should not be that “there is no choice but to do so or else”. Besides being untrue, such a message is also uninspiring. Compare it, for instance, to the Euro-sceptics’ calls for people to claim back the sovereignty and power that rightfully belongs to them and their insistence that this can be achieved — whether it is Italy Northern League calling for people to become, once again, “masters in their own homes” or the British Euro-sceptic Boris Johnson, now the UK’s Foreign Minister, praising voters for having “taken back control”.

Continuity, Not Calamity

As for Italy, since the power of the Prime Minister is rather limited in the country and the influence of party leaders supporting a government quite considerable, changes at the top — which, of course, have been frequent throughout the country’s recent history — have rarely translated into considerable shifts in the executive’s strategies or objectives. This has been even more so when the governing majority did not change.

Consider the topic that is most relevant to this discussion: Italy’s relationship with the EU. Here successive PMs have generally stuck to a line set as far back as the 1950s by the then-governing Christian Democrats: that of placing Italy at the very heart of the European project. Even Silvio Berlusconi did not deviate much from this position, despite his rhetorical skirmishes with European institutions. Do not expect dramatic changes under Gentiloni either, although a few minor clashes between Italy and the European Commission on asylum seeking and immigration may well be forthcoming.

Of course these developments come as no surprise to people working in the financial sectors in Italy and abroad, who knew that the President of the Republic would seek to avoid immediate elections. Indeed, unless Parliament rewrites the electoral law, such elections would have to be held by using different rules for the elections of the two Chambers, which would probably lead to having two different majorities in Parliament and hence to chaos.

In the end, the Euro did not collapse and the Italian stock market has done well in the aftermath of the vote. While it is undoubtedly true that Italy has many problems, it can certainly afford to hold a referendum on Constitutional reform without bringing the whole European edifice down – and it has done just that.

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