A Constitutional referendum took place in Italy on Sunday, 4 December 2016. The referendum concerned reforms outlined by the Italian Prime Minister, Matteo Renzi, to bring about changes to the institutional structure of Italian politics. The referendum was defeated by a wide margin, resulting in Prime Minister Renzi tendering his resignation and potential political and financial instability in the coming months.

Background

In accordance with the Italian Constitution, the Chamber of Deputies and the Senate have equal powers and oversee each other, a feature originally designed to prevent the erosion of democracy, as had previously been seen during 20 years of fascist rule. This means that governments must maintain the support of both houses of Parliament and all legislation must be approved by both houses, which often entails a lengthy decision-making process. Italian Prime Minister, Matteo Renzi, saw this ‘perfect bicameralism’ as detrimental to the progression of legislation and contributing to lasting deadlocks in Italian politics. He proposed a number of changes, affecting 47 of the 139 Articles in the Italian Constitution, the most extensive reforms since it came into force in 1948.

The proposed reforms included:

• Reducing the number of Senators from 315 to 100. The Senate would no longer be directly elected, but rather comprised of regional representatives and mayors, with 5 Senators chosen by the President;
• Reducing the power of the Senate. The Senate would retain equal powers in certain areas such as the ratification of treaties, the election of the Italian President and future constitutional reforms. The Chamber of Deputies would have the final say on a majority of legislation and would give approval to new government formations;
• Abolishing the concurrent competences between the Italian regions and the central government outlined in the Constitution, with these many competences, including education and transport, being assigned either to the regional level or the state level;
• Abolishing the Italian provinces as a layer of administration as well as the National Council for Economics and Labour, a consultative assembly of experts in the economic, social and legal fields.

The proposed reforms followed the Electoral Law passed in 2015, which saw a new two round system for Parliament elections and the allocation of 54 per cent of seats to the political party gaining over 40 per cent of the vote, ensuring a Parliamentary majority. With the proposed reforms, opponents argued that the Chamber of Deputies would wield too much power, especially in the case of a majority government, and argued that reducing the power of the Senate would remove much needed checks and balances in the Italian political system.

Prime Minister Renzi had promised to resign if the referendum did not pass on 4 December.

Result

The referendum was rejected, with 59.1 per cent of voters opposing the proposed reform package. 4 regions out of 20 voted in favour of the reforms, with Italians abroad returning the largest amount of support, at 64.7 per cent. The regions of Sicily and Sardinia in southern Italy represented the largest opposition to the reforms, rejecting the proposals by 71.6 per cent and 72.2 per cent respectively. Turnout was reported at 65.5 per cent of the electorate.

Prime Minister Renzi stated on the evening of 4 December that he takes “full responsibility for the defeat” and that “the Italian people have spoken in a clear and unequivocal way”. He tendered his resignation to Italian President, Sergio Mattarella, on Monday, 5 December. President Mattarella asked Prime Minister Renzi to delay his resignation until the budget for 2017 has been passed by the Senate, which is expected in the coming days.

Implications

The defeat of the referendum could have significant implications for Italy and Europe as a whole. A period of political instability could follow Prime Minister Renzi’s resignation, with President Mattarella expected to appoint a caretaker government and elections scheduled for 2018 expected to be brought forward to spring 2017. Opposition parties such as the Five Star Movement and the Northern League have called for snap elections to be held. The Five Star Movement, known for its anti-establishment and Eurosceptic rhetoric, recently overtook Prime Minister Renzi’s Democratic Party in opinion polls, and could extend its support across Italy in the next general election. The Five Star Movement has pledged to hold a referendum on Italy’s membership of the Eurozone.

There could be significant financial implications of the “No” vote, with a number of banks, such as the long-standing Banca Monte dei Paschi di Siena, at risk of closure if capital investment is withdrawn as a result of market instability following the referendum result. Italy, the third largest economy in the Eurozone, has struggled with high debt to GDP ratios and low economic growth.

This Just the Facts article is also available as an email information service from European Movement Ireland to our members. For more information on becoming a member of European Movement Ireland, contact our offices or visit our Membership webpages.