Renzi packs his bags af­ter ref­er­en­dum rout

Kuwait Times - - FRONT PAGE -

Ital­ian Prime Min­is­ter Mat­teo Renzi said his good­byes yes­ter­day af­ter a ru­inous ref­er­en­dum de­feat that was cheered by pop­ulist lead­ers and sent shock­waves rip­pling around Europe. “My ex­pe­ri­ence of govern­ment fin­ishes here,” said a down­cast Renzi af­ter ac­cept­ing a de­feat of al­most 60-40 per­cent over his con­sti­tu­tional re­form bid. The re­sult, com­ing on the coat­tails of Brexit and Don­ald Trump’s US elec­tion win, has plunged Italy into a pe­riod of po­lit­i­cal un­cer­tainty and cast a shadow over the short- and long-term fu­ture of the eu­ro­zone’s third-largest econ­omy.

Af­ter a first meet­ing with Pres­i­dent Ser­gio Mattarella to dis­cuss his de­par­ture, Renzi posted a link on his Face­book page de­fend­ing his record since he came to power in Fe­bru­ary 2014. “1,000 dif­fi­cult but won­der­ful days. Thanks to ev­ery­one. Viva l’Italia,” he wrote.

Renzi, 41, later ar­rived at the pres­i­den­tial palace in Rome to for­mally offer his res­ig­na­tion. Mattarella was ex­pected to ei­ther ac­cept his res­ig­na­tion, ask him to stay on for a few days in or­der to pass the coun­try’s 2017 bud­get, or ap­point a care­taker leader un­til elec­tions can be held.

Mattarella will then be charged with bro­ker­ing the ap­point­ment of a new govern­ment or, if he is un­able to do that, or­der­ing early elec­tions.

Ini­tial mar­ket re­ac­tion was sub­dued. The euro briefly sank to a 20-month low as in­vestors fret­ted that po­lit­i­cal in­sta­bil­ity could scup­per ef­forts to re­solve a long-run­ning bank­ing cri­sis, and over the pos­si­bil­ity of an elec­tion that could see anti-EU par­ties chal­lenge for power. Italy’s FTSE MIB stock in­dex fell 2.0 per­cent at the open­ing be­fore claw­ing back some ground, un­der­per­form­ing other Euro­pean mar­kets. Ital­ian bond yields rose slightly, hav­ing al­ready edged up prior to Sun­day’s vote.

Traders were re­as­sured in part by the re­sult of Europe’s other cru­cial vote this week­end, which saw Aus­tria re­ject a far-right can­di­date for pres­i­dent. “The next steps are far from clear for Italy and traders are not pan­ick­ing yet”, said Craig Er­lam, se­nior mar­ket an­a­lyst at Oanda. Some an­a­lysts said the ref­er­en­dum could come to be seen as a land­mark mo­ment. Hol­ger Sch­mied­ing, at the Beren­berg pri­vate bank, said the risk that Italy could choose to leave the euro, while still re­mote, had in­creased. Cap­i­tal Eco­nom­ics said: “Italy has taken the first step along a path that could lead it out of the eu­ro­zone.”

Pop­ulists across Europe re­joiced at Renzi’s down­fall, with the founder of Italy’s own anti-es­tab­lish­ment Five Star move­ment Beppe Grillo call­ing for an elec­tion “within a week”. Grillo said a snap elec­tion should be held on the ba­sis of a re­cently adopted elec­toral law de­signed to en­sure the lead­ing party has a ma­jor­ity in the Cham­ber of Deputies, de­spite hav­ing pre­vi­ously called for this to be changed.

Ob­servers var­ied widely in their in­ter­pre­ta­tion of the vote. Bri­tian’s eu­roscep­tic Nigel Farage, who spear­headed the “Brexit” cam­paign, said it looked “more about the euro than con­sti­tu­tional change”. But for­mer Bank of Italy econ­o­mist Lorenzo Codgno in­sisted: “The out­come of the ref­er­en­dum is much more com­plex and nu­anced than ‘just an­other wave of protest across the globe’.”

Gio­vanni Orsina, Pro­fes­sor of Pol­i­tics at Rome’s Luiss univer­sity, said four out of five vot­ers had cast their vote po­lit­i­cally rather than on the mer­its of the re­form. “The vote has broad sim­i­lar­i­ties with the Brexit and Trump phe­nom­ena,” he said. “The elec­torate voted against the es­tab­lish­ment, against Brus­sels. They didn’t get into the sub­tleties.”

Poll data showed the No vote was strong­est in ar­eas with high un­em­ploy­ment, in the rel­a­tively poor south of the coun­try and amongst youth, point­ing to a cor­re­la­tion with levels of dis­af­fec­tion. Most an­a­lysts see im­me­di­ate elec­tions as un­likely, partly be­cause all the main po­lit­i­cal par­ties have al­ready be­gun dis­cus­sions on re­vis­ing the coun­try’s elec­toral laws. As things stand the two houses of par­lia­ment would be elected by two dif­fer­ent sys­tems, which is seen as a recipe for a post-vote stale­mate no­body wants.

The most prob­a­ble sce­nario is a care­taker ad­min­is­tra­tion dom­i­nated by Renzi’s Demo­cratic Party tak­ing over to com­plete the elec­toral re­form be­fore an elec­tion that has to take place by March 2018. The new ad­min­is­tra­tion’s most press­ing pri­or­ity will be fi­nal­iz­ing the coun­try’s 2017 bud­get, which the Euro­pean Com­mis­sion has threat­ened to re­ject as too ex­pan­sion­ary given Italy’s debt levels. Fi­nance Min­is­ter Pier Carlo Padoan is the fa­vorite to suc­ceed Renzi as prime min­is­ter and the out­go­ing leader may stay on as head of his party - which would leave him well-placed for a potential come­back to front­line pol­i­tics at the next elec­tion, when­ever it is. Padoan can­celled a trip to Brus­sels yes­ter­day. — AFP

ROME: Italy’s Prime Min­is­ter Mat­teo Renzi an­nounces his res­ig­na­tion dur­ing a press con­fer­ence at the Palazzo Chigi fol­low­ing the re­sults of a ref­er­en­dum on con­sti­tu­tional re­forms yes­ter­day. — AFP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.