Another referendum vote which will likely change the political establishment is set to take place, this time in Italy, Europe.
Italy’s referendum vote will be on constitutional reform.
A Yes victory will remove power from the senate, therefore proposed laws will only require the approval of the lower house as opposed to the current system of approval of both the senate and lower house.
Italian Prime Minister Matteo Renzi is campaigning for a Yes victory, even going as far as promising to resign if the other camp wins.
The populist party, the Five Star Movement (5SM) are championing the ‘no’ camp. A no vote would mean the status quo would remain.
Francesco Oggiano, the author of “Beppo Grillo Parlante”, told CNBC that he believes the opposition’s major reason for standing at the other end of the referendum is tied to an electoral system which does not allow for citizens to directly choose their representatives, but would rather result in “a parliament full of bureaucrats chosen from their parties that, once elected, will just get to satisfy their leader instead of people’s needs.” This electoral system is allegedly tied to the Yes vote.
With the rise of populism, Italy might be the next country after Brexit and Trump’s win to shake the political establishment. The idea that the parliament would consist of elites seeking their own interests over the interests of the people is enough to get the masses riled up against the reforms.
Italy’s Referendum Vote: Yes or No
Holger Schmieding, chief economist at Berenberg Bank, said in a note on Tuesday he believed the likelihood is that Italy’s citizens would reject the reforms.
“Some whispers suggest that more than half of the up to 20 percent of undecided voters may back Renzi in the end,” Schmieding said.
“Also, many of the rebellious young people who oppose Renzi may not bother to vote. Whereas the outcome is thus no foregone conclusion, I put the probability of a ‘no’ vote at 60 percent,” he added.
A no vote could see Prime Minister Renzi resigning, consequently leading to an early election. If this happens to be the case, the 5SM have a strong chance of winning the election
Economists believe this could resurrect another banking crisis in Europe due to the vulnerability of Italy’s banks, a loss could cause financial instability more than political instability.
Italy’s referendum vote is set to hold on Sunday, December 4.