Italy After the Referendum: Is There a Possibility of Itexit?
On March 27, 2017, the leaders of 27 EU countries (all bar the UK) gathered in Rome’s one of the most famous palaces – Palazzo dei Conservatori. Surrounded by the frescoes carved 400 years ago and the sculptures of all-mighty Popes, they proclaimed their unity and adherence to the principles laid by the EU forefathers. Italy was high on the summit agenda, as Brussels is concerned with its current situation.
For instance, the country that was one of the leading European manufacturers of the late 20th century and a world-known tourist paradise now is a sluggish economy with low productivity growth, high rates of unemployment especially among the youth (up to 38% in 2016) and – that strikes the EU right into its heart – disenchantment with the EU. Given the Brexit shock and the uncertainty it poses, Italy has become the country with the most remarkable anti-EU sentiments (see the bar chart below).
Unlike Britain which has always been «Ding an sich» or «a thing in itself», Italy was among those six countries that signed the Treaty of Rome – the document founding the European Economic Community. Moreover, during the 60-year EU functioning, it was Italy that was able to bridge the gap between the German and French interests and promptly mobilise them if necessary.
Italy has not lost its enthusiasm overnight. The roots of disillusionment lie in the EU monetary policy rather than in the developments of 2015 when Italy became a distribution centre for refugees and migrants from the Middle East and Africa. To specify, in 1999, the lira was replaced by a new single currency – the euro, and eventually Italy found that since the euro introduction it has lost more than gained: prices have doubled, while real income per capita was more impressive in 1999 than now.
Since 2008-2009 crisis the Italian economy has not shown much progress and risks to be overtaken by Spain. Keeping in mind the abovementioned reasons, it is not surprising that the country that has advocated the European integration for so long has some doubts as to whether the euro, the migration flows, and growing regional imbalances are the benefits worth fighting for.
So many hopes were placed on Matteo Renzi who saw the institutional paralysis of the Italian electoral and administration systems as the key obstacles to a thriving economy. He called the referendum on constitutional changes, which took place on December 4, to empower the central government and strengthen the lower house of parliament – the Chamber of Deputies. Matteo Renzi said he would back down if his proposals were not publicly supported and, as we all know, did that on February 19.
The reasons for such an outcome vary depending on the voters. Some of them did not want “an elected king or strongman” that would have emerged if the amendments had been adopted, and given the fact that Italy produced Benito Mussolini and Silvio Berlusconi, their concerns are understandable. The others blame the Italian unwillingness to reform as well as corrupt senators who outfoxed ordinary people again.
Good or bad for the ex-Prime Minister, his resignation had not been a matter of concern for Europe until March 2017 when the anti-EU and anti-establishment Five Star Movement (M5S) and Lega Nord (Northern League) pushed their supporters to participate in the polls scheduled for the next year, with the continuing refugee crisis, the EU’s half-heartedness, and Italy’s downgrading economy playing into their hands.
Both parties have something in common: they oppose migration, have a long-standing intention to wrest Italy from Brussels’ clutches, as they blame the European project for the country’s situation. Correspondingly, European liberals have stigmatised them as populists who try to undermine the fragile political stability in Italy after the February events.
The Five Star Movement (M5S) is a Eurosceptic party standing for the principles of direct democracy and environmentalism. Its founder Beppe Grillo stresses that the M5S does not belong to the left-right political spectrum and stands its ground in the political arena. Five stars refer to the most important issues for the party: public water, environmentally-friendly and energy-efficient transport, sustainable development, the right to Internet access, and environmentalism, which makes it possible to consider this party centre-left. In the European Parliament the M5S is a part of the Europe of Freedom and Direct Democracy (EFDD) group, despite Grillo’s proposals to join the Alliance of Liberals and Democrats for Europe (ALDE) group.
In contrast to the M5S, Lega Nord overtly proclaims itself a right-wing party. Members of LN advocate Italy’s transformation from the unitary to a federal state as well as fiscal federalism and autonomy, especially for the northern regions that have to subsidise the southern territories. The party upholds a “small government”, laissez-faire economic policies and promises to pay enough attention to environmentalism.
The M5S, LN, and some other anti-EU parties (mostly right-wing) are highly likely to form a coalition in the parliament to conduct another referendum. Now Italy is governed by a caretaker cabinet, as it was many times in the past. The incumbent Prime Minister belongs to the centre-left Democratic Party and tries to comfort its EU colleagues with the promises of Italy remaining an integral part of the Union.
By now, it would be an exaggeration to say that Italy has become the greatest threat to the eurozone well-being and to the united Europe stability because the current anti-EU mood is on the rise not only in Italy but almost all over the EU. In their turn, centre-ground Italian parties have about a year to review their agendas in order to bring the votes back. However, the referendum might become a warning for the EU elite: if the gap between ordinary people and the establishment continues to widen, demands for leaving the EU will become louder.