By Shaohua Yan
If common features exist in between the Brexit vote and the U.S. presidential election, one of them has been the underlying anti-establishment populism at play, and this wave of populism is to test the Italian establishment today, on December 4th, when the country is poised to hold a referendum on constitutional reform.
The proposed reform seeks to reorganize Italy’s obsolete political system by reducing the powers of the senate and centralizing power from reginal governments, making it the most extensive constitutional reform since the birth of the Italian Republic in 1946. As such, a reformed constitution is expected to improve the efficiency of legislation and strengthen the Italian government vis-à-vis the parliaments. Coupled with a new electoral law, the referendum package, if voted YES, could lead to a de facto presidential form of politics.
Yet there have been considerable worries that Italian Prime Minister Matteo Renzi risks falling victim to the same politics of populism that has particularly gained momentum after the Brexit vote and Donald Trump’s election as the next U.S. President. These worries do not come out of the blue, but stem from deep-seated problems in Italy’s economy, politics and society.
A sluggish economy, widespread unemployment, mounting debt in the banking system, the persistent migration crisis and pervasive corruption have all contributed to Italian voters’ growing discontent with the political establishment. This is clearly demonstrated by the declining support for the referendum in recent polls, with most of them showing a NO vote in the lead. Renzi’s earlier claim to tie his political career to the result of the vote only helped his opponents, including the populist Five Star Movement party to besiege him by framing the referendum as a vote of confidence in his government.
What is at stake here is not only Renzi’s political career, but also Italy’s future and possibly the Eurozone/EU’s survival. For Renzi, although he has recently backed away from personalizing the referendum, a NO vote would significantly undermine if not cost his position as Prime Minister. For Italy, a NO vote does not necessarily lead to prolonged political instability or the rise of a populist government as some have feared, but it does have negative political and economic consequences. Politically, if constitutional reforms are rejected, the momentum for further reforms would be lost, sending a signal that the Italian political establishment is unable to reform the country. This would also have a long-term economic cost as it would hinder Italy from undertaking much-needed liberal economic reforms. For the EU, whatever result comes out, it has been a victim of the referendum as Renzi himself has recently turned to a ‘Euro-bashing’ posture to win over Euro-skeptic voters. In view of the forthcoming general elections in France and Germany in 2017, the prospect that a populist NO vote could reach a new height will be disturbing if not disastrous for the European political landscape.
Renzi is clearly aware of the high stakes in this referendum and is working with full strength to win it. It seems that many factors are currently working against the Italian leader, but if lessons are learned from the Brexit vote and the recent U.S. election, Renzi still stands a chance at winning an unexpected victory over the referendum. The UK’s EU referendum was notoriously hijacked by party politics and misleading rhetoric, causing Prime Minister David Cameron to resign in the end. Now Italy seems to be taking the same path, with Renzi pledged to resign if he loses the referendum, and the opposition parties are turning the referendum into a vote on Renzi’s government.
Given this, the first lesson for Renzi would be to avoid personalizing and politicizing the referendum, and to focus on the quality of the reform proposal. He would have to send a message to the people that the constitutional reform, despite its technical or substantive defects that some have criticized, is still the right thing to do, and Renzi is the right person to that. Secondly, while Trump’s election has certainly encouraged the Italian populist parties and put Renzi in a difficult position, Renzi may also benefit by properly playing the ‘Trump’ card in a somewhat populist way. To win the support of the ‘silent voices’ that largely determined the result of the U.S. election, Renzi may have to portray himself as the ‘force for change’ as Trump did. Rather than threatening to resign in a NO vote, it would be wiser for him to present a YES vote as support for changing the old political establishment and bringing economic growth.
For Italian voters, they have to be better informed of what they are voting for, as some voters are actually confused by the technically complicated reform proposal. If voters are misled to base their votes on the government rather than merits of the reform proposal, it is voters who would have to swallow the negative consequences in the end. Italians may be able to afford Renzi’s resignation as they have got accustomed to government changes in the past decades, but they also have to realize that Mr. Renzi is the best or better choice to bring credible changes to the country, simply because the alternative Five Star Movement would take the country down a dangerous path by holding a referendum on Italy’s Euro membership. If U.S. voters faced a difficult choice to decide which is the lesser evil between Trump and Clinton, the Italian voters are in a better situation to decide if they have learned the lessons from the Brexit vote and the U.S. election.