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Italy referendum: PM Renzi's future at stake

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Italy referendum: PM Renzis future at stake

Rome - Prime Minister Matteo Renzi expected to resign if he loses reform referendum

By Reuters/AFP

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Published: Sun 4 Dec 2016, 8:08 AM

Last updated: Sun 4 Dec 2016, 10:15 AM

Italians vote on Sunday in a referendum on constitutional reform which will decide the political future of Prime Minister Matteo Renzi, who has promised to resign if he loses.
Financial markets and Europe's politicians fear victory for the opposition 'No' camp could trigger political instability and renewed turmoil for Italy's battered banks, pushing the euro zone towards a fresh crisis.
Polls open at 7 am (0600 GMT), with about 51 million Italians eligible to vote on Renzi's plan to drastically reduce the role of the upper house Senate and claw back powers from regional authorities.

  • PM Renzi expected to resign if he loses reform referendum
  • 51 million Italians eligible to vote
  • Polls open from 7 a.m. to 11 p.m. (0600-2200 GMT)
  • Nervous markets fear victory for 'No'
 
With all the opposition parties lined up against the reform, a victory for Renzi would be a surprise and represent an enormous personal triumph for Italy's youngest prime minister who often appeared to be fighting the campaign single-handed.
All surveys published in the month before a blackout was imposed on Nov. 18 put the 'No' camp ahead. Private polls have continued to be conducted in the last two weeks and bookmakers say 'No' remains the clear favourite to win.
However, in the final days of frenetic campaigning Renzi insisted the public mood was changing, focusing his attention on the millions of Italians who said they were undecided.
Pippo Nicosia, a stall-holder at Campo dei Fiori market in central Rome, said he would vote 'Yes' but had no doubt about the result. "'No' will win, everything will collapse so we might as well all go on holiday," he said.
Turnout
Turnout, expected at between 50 and 60 percent, could be crucial. Pollsters say lower participation could favour Renzi, as hostility to his reform is strongest among young voters and those in the poor south, segments of the population that often don't bother to vote.
A turnout above 60 percent could also make the result more unpredictable, as it would suggest many voters who said they planned to abstain ended up going to the polls.
With bookmakers' odds suggesting a roughly 75 percent chance of a win for 'No', speculation is rife on what Renzi will do in the event of defeat.
He is widely expected to resign and has said he will play no role in any unelected, "technical" government, which President Sergio Mattarella may try to put in place. Some of his allies have urged him to stay in power regardless of the result.
The result of exit polls will be announced as soon as voting ends and the count begins at 11 p.m. After around 30 minutes, the first projections of the result will be announced on the basis of actual votes counted.
If the result is not close, the winner could be clear after the second projection, some time between midnight and 1 a.m. (0000 GMT). In a very close race, the winner may not be known until the count is completed, probably between 2 and 3 a.m.
Economy Minister Pier Carlo Padoan sought to calm nervous markets on Friday, saying there was "no risk of a financial earthquake" if 'No' wins, though there may be "48 hours of turbulence".
Market jitters have concentrated on Italy's banks, saddled with 360 billion euros ($380 billion) of bad loans, and most specifically on Monte Dei Paschi di Siena, its oldest and third largest lender.
The bank needs to raise 5 billion euros ($5.3 billion) by the end of the year to plug a capital shortfall or risk being wound down. Government officials say potential investors may be deterred by political instability if 'No' should win.

Italy's referendum: Facts

Italy goes to the polls Sunday for a referendum on constitutional changes. Some key questions:
To strip the second chamber of parliament, the Senate, of most of its powers to block and amend legislation.
To replace 315 elected and five lifetime Senators with 100 nominees, all but a handful from the regions.
To transfer some powers currently held by local and regional authorities to central government, and to abolish a government policy body.
The government says the reform will end gridlock in parliament and make it easier to pass difficult legislation. Regional reform is important to remove barriers to major infrastructural projects.
Designed to complement a new, already approved, electoral system ensuring biggest vote-winner in elections of a parliamentary majority.
Savings of up to 490 million euros a year in operating costs, according to disputed government figures.
FOR: Prime Minister Matteo Renzi and his backers. Most of his centre-left Democratic Party and his junior coalition partners. Most business leaders.
AGAINST: Main opposition parties - populist Five Star Movement, Silvio Berlusconi's Forza Italia and the far-right Northern League. Some prominent figures in Renzi's own camp, many constitutional experts, voters disgruntled about other issues.
Renzi stays in power with his authority enhanced. He can pursue plans for reforms of the education, legal and administrative systems. Next Italian government will enjoy unprecedented executive powers.
Renzi has said he will step aside. Most observers expect his party to form a new government without him, possibly with Finance Minister Pier Carlo Padoan as prime minister. Possible market turmoil, rise in borrowing costs. Most worrying scenario involves collapse of debt-laden banks.
Early election is possible but seen as unlikely before late 2017 at the earliest. Parliament has already started revising the new electoral law: that has to be finished first.
No vote would boost populist and anti-EU Five Star Movement which could win the next election. Five Star officially favours leaving the euro but two thirds of voters want to stay in single currency and there are many legal barriers to a euro-exit.



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