World, Analysis, Europe

Italy’s referendum: Where do we go from here?

Italians rejected constitutional reform, leading to Prime Minister Matteo Renzi's resignation

06.12.2016 - Update : 07.12.2016
Italy’s referendum: Where do we go from here?

LONDON

On Sunday, 4 Dec. 2016 Italians voted to reject the constitutional reform that Prime Minister Matteo Renzi and his government had proposed.

The reform aimed to change 47 articles of the Italian Constitution, but it ultimately revolved around two main issues: a recentralization of powers from the regional to the state level and (most of all) the weakening of one elected chamber, the Senate (see: http://aa.com.tr/en/analysis-news/italys-referendum-a-specter-haunting-europe/698322). The magnitude of the defeat (40.9 percent against 59.1 percent), together with the high turnout (68.5 percent on the Italian mainland), forced Renzi to resign.

The ball now is in the court of the president of the Republic, Sergio Mattarella. He will decide on how to move on after consulting the main political parties and high institutional figures of the country.

There are three main scenarios ahead. First, Mattarella calls for immediate elections. The main opposition parties, the Five Star Movement and the Northern League, have quickly adopted this line, and have been vocal in wanting to go to the polls as soon as possible.

However, it is almost impossible that this will happen. The electoral law of the Chamber of Deputies is pending before the Constitutional Court. Significantly, the negative result of the referendum means that the Senate has still the same powers as before. It will thus need to give a vote of confidence to any new government.

Given that the current electoral law for the Senate is very proportional, the most likely outcome of a new election will be a hung and highly complicated parliament. During the electoral campaign, the Five Star Movement -- which has always confirmed that it would not participate in any coalition government -- seemed to hardly understand and pay attention to these risks. One, possibly two electoral laws will need to be modified or written before new elections can be held.

Second, the president of the Republic relies on the current parliamentary majority -- composed of the Democratic Party (Renzi’s party) and a number of small centrist parties, which are junior partners in Renzi’s government -- to form and/or support a caretaker government. This is the most likely option to date.

The nature of this government is still very unclear. Mattarella can ask Renzi to form a new government, although the current prime minister has de facto excluded this. The president of the Republic seems to have already convinced Renzi to stay in power for a few more days. The rationale is to approve the still-pending budgetary law. The institutions of the European Union will be closely looking at this process. Alternatively, Mattarella will try to find a new name, either among “experts” (such as the current Minister of Finance, Pier Carlo Padoan, who is likely to receive a positive response from EU leaders) or institutional figures (such as the current president of the Senate, Pietro Grasso) or more traditional politicians.

This caretaker government will probably have a number of specific tasks to accomplish (first of all, the electoral laws). An important point -- which is however unclear -- concerns the length of this eventual caretaker government. Will it be in power for just a few weeks/months, paving the way for upcoming elections? Or will it be in power for around a year and a half until the natural end of the legislature in 2018?

Third, Mattarella attempts to find a larger coalition within the Parliament to support such a caretaker government. This will probably increase the legitimacy of the new government, granting the new prime minister more stability and authority.

What is more difficult is to understand which parties can be part of it. Presumably, the Five Star Movement and the Northern League will not want to partake. This will leave a coalition between the Democratic Party, the small centrist parties (the coalition partners in Renzi’s government), and Forza Italia (Silvio Berlusconi’s party). In the weeks before the referendum, former Prime Minister Berlusconi had indeed said that he would be willing to discuss and negotiate new arrangements in the new political scenario.

Three more considerations on the referendum: First, with regard to the political consequences of the Italian referendum, there is little doubt that the rejection of the constitutional reform has strengthened the Northern League and the Five Star Movement.

Beppe Grillo’s party, in particular, is certainly looking at the next elections with increased optimism and has a realistic chance of winning the elections. The interesting question concerns the political future of Renzi himself.

Renzi has personalized the referendum campaign by pitting himself against the rest of the Italian political spectrum. He barely sought conciliatory tones or allies. This was a highly risky and probably unnecessary gamble -- which galvanized his political rivals. Beyond resigning, Renzi has not yet clarified what he intends to do next (will he remain the secretary of his own party? Will he resign? Will he leave politics all at once?) It might even be that his resignation will strengthen his political figure and increase his electoral chances in, let’s say, one year’s time.

Externally, the government’s defeat in the referendum has been read by many international newspapers as another blow against the liberal order, or against the EU. The Italian “No” vote is considered an extremely dangerous moment especially for the European common currency, the euro.

These fears are greatly exaggerated. If Eurosceptic sentiments have risen in the recent past in Italy, the road to leave the Eurozone is still very long and tortuous. The Italian referendum was fought on largely domestic issues -- be it a reaction against the political establishment or Renzi’s government; be it the result of high (youth) unemployment; be it a legitimate concern over the (poor) quality of the constitutional reform itself.

Second, now that the referendum campaign is over, we will probably realize that the (failed) Constitutional reform was a mix of reasonable principles and a confusing/confused technical implementation.

Weakening the powers of the Senate -- and getting rid of the Senate’s vote of confidence -- were sensible things to do, although too many Italians have been accustomed for too long to associating these changes with improbable authoritarian turns.

If comparative politics tells us anything, it is that different patterns of democracy exist; and that a move from one model to another does not automatically lead to fundamental violations of democracy.

However, the composition of the Senate was disorienting (why not elect the senators directly? Why fill the Senate with part-time local politicians?), together with the powers granted to it (why give the power of constitutional reform and of implementing EU laws to a weakened regional-based Senate?). The philosophy of the entire Constitutional reform seemed contradictory. It transformed the Senate into a real chamber of the regional and local authorities. However, it granted it mainly consultative powers. At the same time, the reform aimed to take away powers from the sub-state levels to recentralize them (e.g., tourism, public administration, infrastructures).

In any case, the major weakness of Renzi’s constitutional reform lied in its inherent incapacity to deliver what it was promising. Renzi claimed that the new, simplified constitutional structure would start a modernizing process and finally deliver the economic, social and administrative reforms that the country desperately needs.

The legislative process would have been smoother and quicker -- as only the approval of the Chamber of Deputies would have been needed to approve laws. Yet, as several observers have pointed out, the rapidity of Italian legislation is not necessarily an issue; in any event, the Italian system produces a high number of laws every year.

Rather, the important question concerns the quality of these laws. Now, arguing that the (poor) quality of the Italian legislative outputs depends to a great extent on the Senate’s equal participation in the process is quite a bold statement – hardly substantiated by solid evidence; ultimately, an unlikely claim. In addition, this ignores one of the well-known failures of Italian governance -- i.e., the poor implementation and enforcement of laws.

This leads me to my third and final point. If Italians had approved Renzi’s constitutional reform, this would have hardly improved in any significant way the current problems of the country. The banking sector would have to face the same, thorny problems. The Italian judiciary and administration -- two major contributors of Italy’s inefficiencies -- are still waiting for a thorough restructuring.

The competitiveness of the Italian economy has been constantly declining over the last 20 years, and nothing in Renzi’s economic reforms will reverse this trend. The fiscal pressure is high, while at the same time Italian governments (Renzi’s included) have been consciously very lenient with tax evaders. From this angle, Renzi’s constitutional gamble might seem a bit surprising. Out of all the reforms that could really start to modernize the country, he decided to risk all his political capital to approve a constitutional reorganization which would have produced, at best, only small and uncertain gains.

* Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.

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