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December 2016 Constitutional Referendum

Matteo RenziItalians voted against Prime Minister Matteo Renzi's proposed constitutional reforms. The premier had promised to step down should the "No" vote prevail. State broadcaster RAI estimated that the "Yes" campaign to back the changes had garnered between 42-46 percent of the vote, while "No" had received somewhere between 54 and 58 percent. Turnout had been relatively high, according to the Interior Ministry, which said some 57 percent of eligible voters had turned out to the polls by 7 pm local time.

At the beginning of his mandate, Renzi presented himself as "the demolition man", the one to liberate the country from the "political cast" and elites. Two and a half years, a large part of his former supporters feel the discrepancy between his promises and daily reality. Italys unemployment rate was 11.4 percent in August 2016 and has debts of 132.7 percent of GDP, the second highest level in the EU, after Greece. Italian banks have massive bad debts, and may need a significant injection of funds. The IMF says Italys economy will not return to levels seen before the crash in 2008 for at least another decade.

PM Renzi faced the biggest test yet of his political career on 04 December 2016, when Italy voted on changing the constitution, a ballot seen in the eyes of some as a vote on the countrys membership of the 28 nation bloc. Renzi reiterated that he would quit if he lost the vote. This led to the opposition framing the referendum as a vote on Renzi and his government, rather than the specific constitutional reform on the table. That could have wider implications for the European Union, because it would open the door to the possibility of the Eurosceptic Five Star Movement getting into power, who made no secret of wanting to hold a referendum on Italy leaving the Euro.

Recent polls suggested that the referendum was headed for defeat, which meant that the Italian president, Sergio Mattarella, would have to name the head of an interim government, to be in place until new elections were held in 2018. Polls showed that few Italians (one in five) actually understood what the referendum was about, which served to reduce the vote to a thumbs-up or thumbs-down to the Renzi government itself. Renzis Democratic party (PD) was now barely ahead of the populist Five Star Movement (M5S), the Eurosceptic party founded by comedian Beppe Grillo. The remains of media magnate Silvio Berlusconis party, Forza Italia, will vote no, as will the populist Northern League party.

Since Renzi announced he would resign if the outcome of the vote is a "no", all the opposition parties aligned against his proposal. And not only the opposition but also a consistent minority in his own party. Polls held just before the pre-vote ban on publishing voters intentions, suggested that Italians are likely to reject Renzis plan to limit powers of the Senate. RAI 3 Televisions survey suggested that turnout will be above 62 percent, saying that 42 percent of voters will cast ballots against the referendum and 37 percent will be in favor. According to a poll conducted by Corriere della Sera newspaper, 55 percent of the people plan to vote No and 45 percent Yes to changes.

According to a survey by research firm Quorum for SKyTG24, about 80 percent of voters aged between 18 and 34 opposed Renzi's proposal to shrink the upper house Senate and claw back power from regional administrations - a tsunami of opposition from a generation that is rewriting the political map in Italy. Italians under 35 earn 26.5 percent less than their contemporaries 25 years ago, while income for the over-65s has risen 24.3 percent, according to research firm Censis.

Once Renzi left office, the subsequent power vacuum would present electoral opportunities to parties intending to leave the European Union, such as the Lega Nord (an Italian version of France's National Front) and the Five Stars Movement, led by the former comedian Beppe Grillo. Opposition party leaders, including Beppe Grillo, head of the maverick populist Five Star Movement, called on President Mattarella to hold early parliamentary elections. We need to vote as soon as possible, said Grillo. The Five Star Movement wants Italy to ditch the euro and stands a good chance of becoming the largest party in any early elections a prospect that spooks financial markets and European leaders.

Renzis resignation would not necessarily see a fresh election called immediately. Italys president would first try and find another combination of parties to form a government. There was speculation in Rome that the Italian president would appoint a caretaker government headed by the countrys current finance minister, Pier Carlo Padoan.




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