Monday, October 24, 2016

Last Call For The Italian Job

Don't look now, but we could be six weeks away from yet another Brexit-level crisis in Europe, this time as Italy faces a referendum in early December that will make or break the government of Italian PM Matteo Renzi.

In the town of Pontida at the foot of the Italian Alps, Alberto Frassoni cheerfully admits he knows nothing about the country’s upcoming referendum, not even the date. 
What the unemployed 48-year-old does know is that the economy isn’t working for him. 
“The euro ruined us because prices doubled,” says Frassoni, who supports the anti-immigrant Northern League that wants Italy to abandon the single currency. “A few things have changed, there are better public services for young and old people, but my job opportunities haven’t changed.” Foreigners “have taken work away from me,” he says. 
It’s the sort of discontent that populists are thriving on, taking them from the vocal fringes of politics right into the mainstream. After Britain’s stunning decision to withdraw from the European Union, now comes another ballot that could topple a leader should Italy defy Prime Minister Matteo Renzi over what, on paper at least, is the constitutional issue of reducing the size and powers of the Senate.

Should the December 4th referendum fail, Renzi has promised to resign as PM, and a narrow loss is looking more and more possible as Italy turns to protectionism and populism (sound familiar?)

What is clear is that many voters don’t know what it’s really about. They fret over the economy, immigration and Italy’s future in or out of the euro. 
Renzi, 41, now has a little over a month to champion a reform that promises to end the political instability that has toppled dozens of governments since World War II. But polls show he could be narrowly defeated, an outcome that is likely to lead to elections and potentially a leader who wants to take Italy out of the euro. 
Pontida stands out neither for its beauty nor rough edges, riches nor poverty. Every year, though, it hosts the annual rally of the Northern League, making it a touchstone for its followers. A poster on the main street proclaims: “Renzi slave of Europe and banks.”
The good news for the prime minister is that Frassoni, a former delivery driver, is among a third of the electorate who polls show might not even vote. There’s also at least 20 percent of voters who haven’t made up their minds in surveys that put Renzi’s “Yes” campaign trailing by four percentage points.

It's a bold move by Renzi, but if it fails, Italy will almost certainly elect a PM who will want to make sure that Italy is the next country out of the euro currency or the EU entirely.

Keep an eye on this one.  So far the EU has dodged plebiscite bullets in Spain but Lithuania's new government is very nationalist and more such elections around Europe are certainly on the way, the big one being France next year where President Hollande is pretty much doomed and Marine Le Pen and her French Trumpites are waiting in the wings.

2017 is the year the EU could crack up completely, folks.  We may get out alive in November but the rest of the world won't be so lucky.

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