Italy's Big Vote Could Rattle Europe Once Again

Enlarge this image toggle caption Andrew Medichini/AP Andrew Medichini/AP

Europeans are anxiously watching Italy where a Sunday referendum on constitutional amendments could bring down the government and make it the latest casualty of the anti-establishment wave sweeping the West.

Italians are being asked to vote "yes" or "no" to constitutional changes aimed at bringing the Italian political system more in line with the European norm.

The changes involve sharply reducing the size of one of the chambers of parliament, the Senate, shifting its powers to the executive, and eliminating the Senate's power to bring down government coalitions.

The amendments also shift some powers now held by the regions to the central government, thereby reducing frequent and lengthy court battles between Rome and the regional governments.

Prime Minister Matteo Renzi says a "yes" vote in the referendum will end the legislative gridlock that has produced more than 60 governments in the last 70 years. Some constitutional critics, however, favor a "no" vote, saying the amendments would concentrate too much power in the executive.

The issues are so dry and technical many voters don't understand them. And a poor economic outlook and large numbers of disillusioned Italians have turned the vote into a referendum on Renzi himself.

In Rome last week, a rally in favor of the amendments was held in a downtown theater. Retired school teacher Leandra Millefiorini said she's going to vote in favor "because I think that Italy needs to change, we all need change, we must be more European."

But Millefiorni worried about the outcome.

"Italian people (are) conservative, conservative. I hope," she said. "But ..."

In fact, the last polls allowed by law showed that two weeks before the referendum, the "no" vote was ahead by some 5 percentage points. Polls also showed that 15 percent of Italians were still undecided.

The Italian constitution was written after World War II and the defeat of Benito Mussolini's fascist dictatorship. It was purposefully designed to create a weak government and a powerful parliament — so as to prevent the rise of another Mussolini.

Domenico Fracchiolla wants it to stay that way. A political science professor at Rome's Luiss University, he says the constitution was drafted by representatives of the entire political spectrum, "by people that were shooting each other just few weeks before, so it is written in blood."

Enlarge this image toggle caption Gregorio Borgia/AP Gregorio Borgia/AP

However, Roberto D'Alimonte, who also teaches political science at Luiss University, says, after 70 years, it is time for change.

"Italy is different, the world is different, the challenges are different and we need a pattern of government where powers are little more concentrated, from too much fragmentation of power to a little less fragmentation of power," he said.

Prime Minister Matteo Renzi, who at 41 is Italy's youngest government leader and one of its most reform-minded, has been campaigning hard for the constitutional amendments.

"This is the chance for Italians," he said. "If they want change, they'll vote 'yes.' If they don't want change, they'll vote 'no,' no hard feelings." But, he added, "if the 'no' vote wins, Italy will still have the biggest, most costly and slowest parliament in Europe."

The referendum campaign has been long, strident and nasty.

Months ago, when surveys showed that 70 percent of Italians were in favor of the amendments, Renzi staked his political future on the referendum, vowing to step down if the "no" vote wins.

That prospect rallied opposition parties. It's a crew of strange bedfellows that includes — on the right — the anti-European Union Northern League and former Prime Minister Silvio Berlusconi, who was originally in favor of the amendments and then suddenly switched sides.

On the left, the most vocal supporters of a "no" vote are veteran members of Renzi's own Democratic Party, rivals sidelined by the young and media savvy prime minister who would welcome his fall from office.

One of the loudest voices in this anomalous grouping is the anti-establishment Five-Star-Movement, whose platform terrifies Italy's European partners. It calls for a government-guaranteed, universal income, abolishing Italy's fiscal commitments to the European Union and a referendum on Italy's membership in the Euro — a prospect that could unravel the entire single currency Eurozone.

The Movement's founder, stand-up comedian Beppe Grillo, hailed Donald Trump's upset presidential victory as a harbinger saying, "it is the risk-takers, the stubborn, the barbarians who will carry the world forward."

Earlier this week, Buzzfeed News published a lengthy piece claiming that Five-Star-Movement leaders "have built a sprawling network of websites and social media accounts that are spreading fake news, conspiracy theories, and pro-Kremlin stories to millions of people." Grillo dismissed the report as "fake news."

Last weekend, several thousand Five-Star-Movement supporters took part in a rally in Rome in favor of a "no" vote.

At the end, Grillo, who has a penchant for histrionics, addressed the crowd.

"You must vote 'no,'" he yelled, "but vote with your guts, not with your brain, use your instincts, trust your gut and then vote 'no.'"

A week earlier, he had accused Renzi and supporters of a "yes" vote of being the "serial killers of our children's future."

In the case of a "no" victory, it is not clear whether Renzi will stick to his promise to step down or whether President Sergio Mattarella can persuade him to stay in office to calm financial markets and oversee electoral reform that could pave the way to early elections in the next few months.

Many analysts worry that the most immediate impact of a "no" vote would be on Italy's fragile banking sector and its $400 billion dollars in bad loans that have hampered government hopes for a more substantial recovery in the third-largest economy in the Eurozone.

In the wake of the populist tide that began this year with the Brexit vote in June and and was energized by Trump's victory in the US last month, Italy's EU partners and financial markets are beginning to wonder whether a referendum aimed at ensuring greater political stability may in the end trigger political chaos.