On Sunday December 4th Italians will vote whether to approve a constitutional law to amend the Italian constitution and restructure Italy’s government that could pave the way for changing the way Italy is governed and functions within the European Union.
Italian Prime Minister Matteo Renzi has proposed reforming Italy’s constitution and supports the “yes” vote on December 4th which strengthens the role of prime minister, frees Italy from burdensome legislative gridlock, abolishes Italy’s provinces, decreases the membership and power within the Senate, and revises Italy’s electoral law, allowing the party that won the most votes in the election to gain many more seats in Parliament and to form a stronger government.
Prime Minister Renzi has pledged to resign if the “No” vote wins that would keep Italy’s Constitution intact but also introduce a new period of uncertainty about Italy’s role in European Union since a “No” exposes Italy’s heavily indebted banks to more volatility, causing Italy’s bond yields to jump while emboldening euro skeptic movements in Italy such as the populist Five Star Movement Party which has some close similarities to Greece’s Syriza Party and is led by Beppe Grillo, a comedian.
Besides facing opposition from Five Star Movement, the “Yes” vote is also under pressure from leftists in Renzi’s own Democratic Party, Italy’s anti-immigrant and euro skeptic Northern League, and former Italian Prime Minister Silvio Berlusconi who supports a “No” vote.
Opponents of Italy’s constitutional reform claim that a “Yes” vote would give too much power to the prime minister, weaken the role of president, and make the Italian government too powerful.
Prime Minister Renzi’s popularity has been decreasing across Italy in recent months and most opinion polls show the “No” vote is currently leading, although many Italians are still undecided.
Italy’s unemployment rate currently stands at 11.6 % with 36.4 % youth unemployment.
Italy has second highest ratio of debt to GDP (132.7 %) in the European Union behind Greece.
The European Central Bank (ECB) will be holding a monetary policy meeting this Thursday and ECB President Draghi could be expected to weigh in about the outcome of the elections if there is volatility and unease in the market this week.
Austria Holds Presidential Vote On Sunday
Austria will have their presidential election on Sunday that will see Norbert Hofer, a populist leader from the anti-immigrant and euro skeptic Freedom Party running against Alexander Van Der Bellen, a former Green party leader who is more liberal minded and holds pro-EU views.
Most polls in Austria are currently too close to call.