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Now That Italy Has Rejected Constitutional Amendments, What’s Next? Now That Italy Has Rejected Constitutional Amendments, What’s Next?
(about 1 hour later)
ROME — Italians voted in record numbers on Sunday to reject a series of proposed changes to the Constitution.ROME — Italians voted in record numbers on Sunday to reject a series of proposed changes to the Constitution.
Proponents of the changes, including Prime Minister Matteo Renzi, said they would streamline Italy’s cumbersome legislative process by eliminating two-thirds of the Senate and stripping regions of power over crucial issues like transportation, energy and infrastructure.Proponents of the changes, including Prime Minister Matteo Renzi, said they would streamline Italy’s cumbersome legislative process by eliminating two-thirds of the Senate and stripping regions of power over crucial issues like transportation, energy and infrastructure.
Critics, which included populist groups, said the proposals would have concentrated too much power in the hands of government.Critics, which included populist groups, said the proposals would have concentrated too much power in the hands of government.
The vote was widely considered a referendum on Mr. Renzi’s nearly three-year-old government, although some voters were genuinely displeased with the proposed changes.The vote was widely considered a referendum on Mr. Renzi’s nearly three-year-old government, although some voters were genuinely displeased with the proposed changes.
Mr. Renzi had angered many Italians because of what they perceived as a failure to stimulate economic growth and address unemployment, and he was viewed by some as arrogant.Mr. Renzi had angered many Italians because of what they perceived as a failure to stimulate economic growth and address unemployment, and he was viewed by some as arrogant.
The most contentious proposal deals with changes to the Senate, which would have become a mostly consultative body consisting of regional and municipal officials.The most contentious proposal deals with changes to the Senate, which would have become a mostly consultative body consisting of regional and municipal officials.
But many constitutional experts wanted to preserve the existing authority of the Senate as a check on the government.But many constitutional experts wanted to preserve the existing authority of the Senate as a check on the government.
The prime minister’s resignation was necessary because he had staked his political future on the referendum. He repeatedly stated that he was in politics to affect change, not to “keep a chair warm.” When the changes he wanted were rejected, he kept his promise to quit.The prime minister’s resignation was necessary because he had staked his political future on the referendum. He repeatedly stated that he was in politics to affect change, not to “keep a chair warm.” When the changes he wanted were rejected, he kept his promise to quit.
Mr. Renzi may be leaving the political arena, but Sergio Fabbrini, director of the Luiss School of Government in Rome, predicted that he would not be absent for long.Mr. Renzi may be leaving the political arena, but Sergio Fabbrini, director of the Luiss School of Government in Rome, predicted that he would not be absent for long.
“Defeat for Renzi does not mean defeat in the long term,” he said, noting that those who backed the referendum changes — about 40 percent of voters — formed what he described as a “party of the nation,” which backed Mr. Renzi, who nonetheless faces a fight to maintain control of the Democratic Party.“Defeat for Renzi does not mean defeat in the long term,” he said, noting that those who backed the referendum changes — about 40 percent of voters — formed what he described as a “party of the nation,” which backed Mr. Renzi, who nonetheless faces a fight to maintain control of the Democratic Party.
“It is a movement with a clear leader, a clear program and a clear European outlook,” Mr. Fabbrini said. The opponents of the changes, on the other hand, were a motley array of parties and movements that shared a sovereign, Euroskeptic and anti-globalization vision, but perhaps little else.“It is a movement with a clear leader, a clear program and a clear European outlook,” Mr. Fabbrini said. The opponents of the changes, on the other hand, were a motley array of parties and movements that shared a sovereign, Euroskeptic and anti-globalization vision, but perhaps little else.
“Apparently Mr. Renzi lost the battle, but the war is still to be fought,” he said.“Apparently Mr. Renzi lost the battle, but the war is still to be fought,” he said.
Mr. Renzi was expected to tender his resignation on Monday. President Sergio Mattarella must now consult with Italian political leaders and gauge whether there is enough support for a caretaker government and under what terms.Mr. Renzi was expected to tender his resignation on Monday. President Sergio Mattarella must now consult with Italian political leaders and gauge whether there is enough support for a caretaker government and under what terms.
In the short term, the budget must be passed and the electoral law must be modified or completely overhauled. Mr. Mattarella might appoint a caretaker government to remain in power until elections in the spring. Or he might try to negotiate a longer-term solution, with elections in 2018, when the legislature is scheduled to end.In the short term, the budget must be passed and the electoral law must be modified or completely overhauled. Mr. Mattarella might appoint a caretaker government to remain in power until elections in the spring. Or he might try to negotiate a longer-term solution, with elections in 2018, when the legislature is scheduled to end.
Antonio Polito, deputy director of the Milan-based daily Corriere della Sera, said three people are in position to head a caretaker government: Pier Carlo Padoan, Italy’s finance minister (“widely respected in Europe,”); Pietro Grasso, Senate president (an institutional choice); and Dario Franceschini, culture minister (a Democratic Party heavyweight). Antonio Polito, deputy director of the Milan-based daily Corriere della Sera, said three people are in position to head a caretaker government: Pier Carlo Padoan, Italy’s finance minister (“widely respected in Europe”); Pietro Grasso, Senate president (an institutional choice); and Dario Franceschini, culture minister (a Democratic Party heavyweight).
Yes, because Italy’s electoral law, the so-called Italicum, which was approved in 2015, is under review by the constitutional court.Yes, because Italy’s electoral law, the so-called Italicum, which was approved in 2015, is under review by the constitutional court.
The law calls for a two-round system, which gives the winning party a majority bonus, but the law applies only to the Lower House, and not to the Senate (which the referendum was supposed to partly eliminate).The law calls for a two-round system, which gives the winning party a majority bonus, but the law applies only to the Lower House, and not to the Senate (which the referendum was supposed to partly eliminate).
The law gives the winning party a significant majority, meaning that barring internal tussles, the winning party could rule for an entire five-year term, which is unusual in Italy.The law gives the winning party a significant majority, meaning that barring internal tussles, the winning party could rule for an entire five-year term, which is unusual in Italy.
As a result, many parties oppose the law. The populist Five Star Movement was among them, but it now wants the law to stand because it is performing strongly in the polls.As a result, many parties oppose the law. The populist Five Star Movement was among them, but it now wants the law to stand because it is performing strongly in the polls.
The “No” vote has opened a period of economic and political uncertainty in Italy and in Europe, each feeding into the other.The “No” vote has opened a period of economic and political uncertainty in Italy and in Europe, each feeding into the other.
France and Germany, two other major European Union members, are already scheduled to hold crucial elections in 2017, and the addition of one in Italy would add to the uncertainty.France and Germany, two other major European Union members, are already scheduled to hold crucial elections in 2017, and the addition of one in Italy would add to the uncertainty.
The referendum result in Italy could bolster anti-establishment forces across the European Union, which is already struggling to deal with the consequences of the Brexit vote.The referendum result in Italy could bolster anti-establishment forces across the European Union, which is already struggling to deal with the consequences of the Brexit vote.
Financially, although the markets were relatively calm on Monday, there is concern about the long-term economic consequences of the referendum.Financially, although the markets were relatively calm on Monday, there is concern about the long-term economic consequences of the referendum.
The Five Star Movement has pledged to carry out a referendum on whether Italy should remain in the eurozone if it comes to power, potentially undermining the single currency’s stability and that of the wider European Union.The Five Star Movement has pledged to carry out a referendum on whether Italy should remain in the eurozone if it comes to power, potentially undermining the single currency’s stability and that of the wider European Union.
The stability of Italian banks, on the other hand, is a more immediate and worrying issue.The stability of Italian banks, on the other hand, is a more immediate and worrying issue.
Mr. Renzi’s government had been working on plans to recapitalize Italy’s weakest banks, many of which are saddled with bad loans. There were plans, for instance, to restructure Monte dei Paschi di Siena, one of Italy’s most troubled banks and a linchpin of the financial system.Mr. Renzi’s government had been working on plans to recapitalize Italy’s weakest banks, many of which are saddled with bad loans. There were plans, for instance, to restructure Monte dei Paschi di Siena, one of Italy’s most troubled banks and a linchpin of the financial system.
Now that Mr. Renzi is leaving, financial analysts worry that the bank rescue efforts will collapse. That would turn away desperately needed private investors and lead to a renewed and possibly contagious financial crisis in Europe, where banks and financial institutions continually lend money to one another.Now that Mr. Renzi is leaving, financial analysts worry that the bank rescue efforts will collapse. That would turn away desperately needed private investors and lead to a renewed and possibly contagious financial crisis in Europe, where banks and financial institutions continually lend money to one another.
Troubles in the banking sector weigh heavily on the wider Italian economy and could create a vicious circle if economic stagnation continues.Troubles in the banking sector weigh heavily on the wider Italian economy and could create a vicious circle if economic stagnation continues.
If more businesses and consumers struggle to pay their debts, the number of bad loans could rise further and make it even more difficult for banks to provide the credit businesses need to expand or invest.If more businesses and consumers struggle to pay their debts, the number of bad loans could rise further and make it even more difficult for banks to provide the credit businesses need to expand or invest.
The market interest rate, or yield, on Italian 10-year government bonds has nearly doubled since August, to more than 2 percent, a sign that investors are worried and consider the bonds to be increasingly risky.The market interest rate, or yield, on Italian 10-year government bonds has nearly doubled since August, to more than 2 percent, a sign that investors are worried and consider the bonds to be increasingly risky.
Populist forces in Italy share a common anti-European sentiment with their continental counterparts, but they are more heterogeneous and have a longer history than elsewhere in Europe.Populist forces in Italy share a common anti-European sentiment with their continental counterparts, but they are more heterogeneous and have a longer history than elsewhere in Europe.
The Northern League has been riding the populist wave for more than two decades on a right-wing, anti-immigration and protectionist platform.The Northern League has been riding the populist wave for more than two decades on a right-wing, anti-immigration and protectionist platform.
The Five Star Movement, which recently won mayoral elections in Rome and Turin, is an internet-based group that draws support from a much broader political spectrum.The Five Star Movement, which recently won mayoral elections in Rome and Turin, is an internet-based group that draws support from a much broader political spectrum.
It aims to sweep away Italy’s elites from positions of power and replace them with regular citizens, and has repeatedly called for a referendum on whether Italy should leave the eurozone. It is loath to make political compromises, refusing to participate in coalition governments.It aims to sweep away Italy’s elites from positions of power and replace them with regular citizens, and has repeatedly called for a referendum on whether Italy should leave the eurozone. It is loath to make political compromises, refusing to participate in coalition governments.
The political leadership of the movement is unclear. While the comedian Beppe Grillo is the party’s ideologue and political comptroller, the Five Star Movement’s candidate for prime minister is being challenged by two young candidates, Alessandro Di Battista and Luigi Di Maio.The political leadership of the movement is unclear. While the comedian Beppe Grillo is the party’s ideologue and political comptroller, the Five Star Movement’s candidate for prime minister is being challenged by two young candidates, Alessandro Di Battista and Luigi Di Maio.