We have all heard about Brexit and the impact that it will have on the world. We have witnessed the recent American Presidential Election that has sent a shock to both the American political system, but also the global political system. There is another election that warrants our attention. This election could arguably have a bigger impact than Brexit did. It is the Italian Constitutional Referendum.
Italy has had a somewhat shaky political system since the end of World War II. Since 1946 and the establishment of the current constitution, Italy has had 41 administrations, which means the average time that one would serve as Prime Minister before leaving office was 1.7 years. This lack of stability was largely caused by the constitutional structure of Italy and many different political parties fighting for power.
Italy’s current Prime Minister, Matteo Renzi, came to office on a third way platform that many compared to U.S. President Bill Clinton and U.K. Prime Minister Tony Blair. Renzi prioritized constitutional reform as one of the main goals of his government. The structure of the Italian government makes it easier to prevent change than it does to create change, therefore from Renzi’s perspective, change needed to happen.
One idea that was proposed in the referendum was the weakening of the Senate. Italy has a bicameral legislature with an upper house (the Senate) and a lower house (the Chamber of Deputies). Unlike most European countries, the upper house has real power and must approve all legislation. This is contrasted by countries like the United Kingdom where the lower house (the House of Commons) has constitutional mechanisms to override the upper house (the House of Lords). The constitutional referendum would make the Italian Senate a mostly ceremonial body with little real power, like the House of Lords.
Opponents of the referendum claimed that the measures proposed would make the government (and Mr. Renzi) too powerful. Some even went as far to compare Renzi to Benito Mussolini. Italy faces the same issues that the United States faces in that there is political gridlock between different political parties and very little gets done in government. The proposed changes would make it easier for the party in power to govern by reducing the ability of minority parties to prevent government legislation from passing.
Many of the reforms that Renzi has advocated are necessary for both Italy and Europe. One example of this includes structural reforms in the labor market. Italy has an uncompetitive economy, especially when compared to its European neighbors. The reforms that Renzi proposed were altered because of the influence that unions and other interest groups have over the fractured Italian political system. The proposed referendum would allow Italy to make the changes that it needs to make and restore confidence in the economy and Italy’s place in the European Union.
The proposed reforms would also go hand in hand with the new electoral system that has already been implemented by the Italian Parliament. For many years, Italy was faced with ungovernable parliaments that had many political parties that often couldn’t combine with each other to form a governing coalition. The result was frequent elections and a frequent change in Prime Minister (as mentioned above). The new electoral law calls for a runoff election between the two largest parties in the first round, with the party winning the runoff being given enough seats to have a majority. This would also make passing reforms a lot easier.
A victory for the No Campaign could have ramifications for the entire European Union. It is possible that Renzi will be forced to resign and likely that an election will be held sooner rather than later, so that a leader can gain a mandate to rule. Polls show that Renzi’s Democratic Party would likely lose to the Populist and Eurosceptic Five Star Movement. This would be a major victory for Euroscepticism, as Italy could be ruled by a Eurosceptic Prime Minister who could call for a referendum on Italy’s membership in the European Union, much like Brexit.
Italy’s future in the European Union could have greater ramifications than the United Kingdom’s future in the European Union. In addition to being a member of the European Union, Italy is also a member of the Eurozone. Italy has the third largest economy in the Eurozone behind Germany and France respectively. If Italy were to leave both the European Union and presumably the Euro, the financial impacts would make Brexit (an event that has little to do with the Euro directly) seem miniscule.