No, Matteo Renzi's referendum isn't Italy's Brexit

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The European Union saw off one near-death experience yesterday, as Alexander van der Bellen - a Green running under independent colours - saw off Norbert Hofer, the far-right candidate, taking 53 per cent to 47 per cent. 

"Turn of the tide: Europeans hail Austrian far-right defeat" is the Guardian's splash, while "Austria says NEIN to far-right" is the Metro's take.

It's a reminder that the relentless march of the far right is not as irresistible as the Le Pens of the world would like to think, and, for the left, a rare brightspot in a year of seemingly unbroken retreat, albeit by a margin that is too close for comfort. 

But on the other side of the Alps, things are not looking so great. Italian voters have rejected Italian PM Matteo Renzi's proposed constitutional reforms in a landslide, resulting in Renzi's resignation. (For a good primer on who Renzi is or rather was, Joji Sakurai wrote a very good one for us a while back, which you can read here)

"Europe in turmoil as Italian PM is defeated" is the Times splash. It has many worrying that Italy made be headed out of the Euro at worst and trigger another financial crisis in the Eurozone at best. Over at the Spectator, James Forsyth suggests that this will make the EU27 reluctant to put the squeeze on the City of London, which is still the Eurozone's clearing centre. Others, meanwhile, are saying it's all the latest in the populist, anti-establishment wave that is politics in 2016.

Are they right?

The reforms - which, among other things, would have ended the Italian system of "perfect bicameralism" whereby the upper house has as much power as the lower, replacing the former with a legislature drawn from the regions in a similar manner to Germany's - were something of a dog's dinner, and although the referendum was forced on Renzi as they were unable to secure a two-thirds majority among legislators, it was a grave error to turn the vote into a referendum on his government. (Bear in mind that Italy is a multi-party democracy where the left's best ever performance netted it 49.8 per cent of the vote, so he was on a hiding to nothing with that approach.)

If there is a commonality in the votes for Brexit, Trump, Hofer, it's in the revenge of the countryside and the small towns against the cities, with the proviso that in Austria, that vote was large enough to hold back the tide). This was very different. Particularly striking: young graduates, so often the losers at the ballot box and pretty much everywhere else post-financial crash, voted against the reforms yesterday.

Nor can a vote that was supported by Silvio Berlusconi, two of the three major parties, as well as Mario Monti, the technocrat appointed effectively on the demands of Italy's creditors, and the Economist be accurately described as a revolt against "the establishment" if that term is to have any meaningful use whatsoever.  

Of course, it could yet lead to a Brexit-style shock. Renzi's Democratic Party could collapse into in-fighting if his departure is permanent - though who knows, he might parlay his graceful concession speech and the likely chaos that is to follow into a triumphant second act - and although his party has a narrow lead in most polls, the Five Star Movement could win a snap election if one occurs.

That raises the nightmare prospect for Brussels of a Eurosceptic in power in a founder-member of the European Union and the single European currency. (That said, it should be noted that Five Star are opponents of the Euro, not of the European Union. The word "Eurosceptic" is perhaps making some anti-Europeans here in the UK overexcited.)

But as Open Europe noted in their very good primer on the referendum before the result that is still very much worth reading, that not only requires Five Star to win an election, but to hold and win not just a referendum on Italy's Euro membership, but to first win a referendum on changing the constitution to allow such a referendum in the first place. (And remember that support for the EU is up in the EU27 following the Brexit vote, too.)

The biggest risk is financial, not political. Renzi had acquired a quasi-mythical status in the eyes of foreign investors, meaning that his departure will make global finance nervous and could result in the rescue deal for Monte Paschi, the world's oldest bank, being mothballed. Although a economic crisis on the scale of the one Italy experienced in 2011 is unlikely, it's not impossible either. And what follows that may justify the comparisons to Trump rather more than Renzi's defeat yesterday.

Stephen Bush is political editor of the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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