Italy referendum: What happened and what it means?

Posters for the "No" campaign on a wall ahead of Italy's referendum in Florence on Dec 3, 2016.
Posters for the "No" campaign on a wall ahead of Italy's referendum in Florence on Dec 3, 2016. PHOTO: BLOOMBERG

ROME  - Italian Prime Minister Matteo Renzi announced his resignation on Monday (Dec 5), hours after projections showed he had suffered a crushing defeat in a referendum on constitutional reforms.

Here are some key facts about the referendum and its possible ramifications: 

1. What is the margin won by the No camp? 

Interior Ministry projections suggested the No camp, led by the populist Five Star Movement, had carried the vote by a margin of almost 60-40, with a near 70-per-cent turnout underlining the high stakes and the intensity of the debate.

The result dealt another blow to Europe’s embattled political establishment in its effort to thwart the anti-elite movement. The thorough rejection of Mr Renzi’s efforts to streamline lawmaking was a significant boost for the country’s surging anti- establishment forces, just weeks after Mr Donald Trump won the presidential election in the United States. Mr Renzi’s defeat also risked unleashing financial upheaval in Europe’s third-largest economy, as Italy’s weak banks struggle to contain the fallout.  

2. What was proposed in the referendum?

To streamline the government, Mr Renzi had proposed to:

- Strip the second chamber of parliament, the Senate, of most of its powers to block and amend legislation.

- Replace 315 elected and five lifetime Senators with 100 nominees, all but a handful from the regions.

- Transfer some powers currently held by local and regional authorities to the central government, and to abolish a government policy body.

3. What supporters and opponents say?

Mr Renzi’s backers believed they were voting for overdue changes.  The government said the reform would end gridlock in parliament and make it easier to pass difficult legislation and remove barriers to major infrastructural projects. It also said the reform was designed to complement the new, already approved, electoral system ensuring the biggest vote-winner in elections of a parliamentary majority. There would also be savings of up to €490 million (S$740 million) a year in operating costs.

Mr Renzi's supporters include most of his centre-left Democratic Party and his junior coalition partners, as well as most business leaders.

Opposition parties, however, had denounced the proposed amendments as dangerous for democracy because they would remove important checks and balances on executive power. Spearheaded by Five Star, the biggest rival to Mr Renzi’s Democratic party, the “No” campaign also capitalised on his declining popularity, a sluggish economy and the problems caused by tens of thousands of migrants arriving in Italy from Africa. 

Other opponents include former prime minister Silvio Berlusconi’s centre-right Forza Italia, the far-right Northern League, some prominent figures in Mr Renzi's own camp, many constitutional experts, and voters disgruntled about other issues. 

4. What  is the most likely scenario after Mr Renzi's resignation? 

President Sergio Mattarella appoint a head of government with the support of the current majority or a new enlarged majority. A number of names are already circulating including Finance Minister Pier Carlo Padoan and Senate leader Pietro Grasso.

The caretaker government would be tasked with passing the 2017 budget in Parliament and modifying a new electoral law before elections take place.

The new head of government could also decide to continue until the end of the current parliamentary term in February 2018, a move that would likely prove unpopular with political groups such as Five Star, who are calling for elections as soon as possible.

5. How likely is Mr Renzi to stay in power? 

The crushing victory for the NO camp, which is thought to have scored almost 60 per cent of the vote, makes the return of Mr Renzi a very distant possibility.

Mr Renzi – after a final meeting of his cabinet – will visit Mr Mattarella , who could ask him to form a new  government. Theoretically Mr Renzi could win a vote of confidence in Parliament, either with his current majority or with a new one including Mr Silvio Berlusconi’s centre-right Forza Italia.

But during a press conference early Monday, Mr Renzi seemed to exclude this possibility. “My experience of government finishes here,” he said.

6. Is a snap election possible? 

It is highly unlikely. 

A recent electoral reform was designed to ensure the leading party has a parliamentary majority in the Chamber of Deputies, while the failure of the constitutional reform of the senate means it still maintains a proportional system, making the two chambers irreconcilable and a parliamentary majority almost impossible.  

 

The populist Five Star movement, whose founder and leader Beppe Grillo has called for an election “within a week”, believes the electoral law could be modified in the senate if necessary to align it more closely with that of the Chamber of Deputies.

But most other political parties, who have a majority in Parliament, disagree, precisely to avoid a victory of the populist party. They are instead advocating reform of the electoral law.

In the end, it will be for Mr Mattarella to decide Italy’s immediate future and to ensure there is a majority in favour of forming a technocratic government if he wants to avoid, as many analysts believe, early elections next year.

SOURCE: AFP, WASHINGTON POST