» Europe: The Italian Referendum: Renzi’s Gamble Decision Economics

Europe: The Italian Referendum: Renzi’s Gamble

Posted November 17, 2016 by rvillareal

Europe: The Italian Referendum: Renzi’s Gamble

Summary Highlights

 

  • After having failed to secure the two-thirds endorsement in Parliament, the Italian Prime Minister Matteo Renzi has called a referendum to approve a reform to the Constitution that is one of the flagship projects of his government. 
  • This vote represents a crucial moment for Italy since Renzi’s political fate is at stake. In fact, he has vowed to resign if the reform is rejected, this potentially benefitting populist parties.
  • The Italian electorate agrees on the need to change the rules of the political game, but personalization of the ballot may turn it into an anti-establishment vote.
  • According to the last polls, the most likely scenario is a victory of the No with a small margin, even if the percentage of undecided remains high. However, alleged risks of domestic extreme political instability seem overstated.
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