referendum
Italian PM, Mateo Renzi
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Samina Tippu |

Italian public would be voting, on Dec. 4, in a referendum to approve of a bill of political reforms presented by Italian Prime Minister Matteo Renzi. On the face, it looks fairly innocuous; the bill is a proposal to reduce the role of the senate and to empower the chamber of deputies. This is to reset the political balance created by the post-war Italian constitution of 1948.

At the moment, there is a perfect bicameral system in Italy which renders two legislative chambers to be at par with each other wielding the same powers. This is supposed to create balance and plurality but in practice, it leads to unending political gridlocks – simple pieces of legislation can take months and months of wrangling. Mateo Renzi calls this a sclerotic system and promises to change it. He won elections in 2014, on the promises of change and vows to resign if “No Vote” won in the referendum.

Renzi’s possible defeat in the referendum can now throw Italy into a political crisis which already has fragile political stability. This can pave the way for Beppe Grillo’s Five Star Movement (M5S) to come into power, the party who has pledged to call a referendum for Euro exit that can eventually lead to Italexit.

Currently, the Italian legislature consists of 945 elected members. It is composed of the Chamber of Deputies, with 630 members, and the Senate of the Republic, with 315 members. Senators are also directly elected like in the US. Duties and powers are same for both the houses and there is no distinction between them in the constitution. (though senate is considered upper house when there is need to replace President of the Republic because President stands in the role of head of the state.) Renzi wants to transform the senate and to tip the balance of power clearly towards the Chamber of Deputies. After reforms Senate will consist of only 100 seats – 74 regional councilors, 21 majors and five presidential. Chamber of Deputies would have the final say on everyday bills but Senate would still retain its veto on constitutional matters

Though Italian parliament has already passed the reforms with a slim majority but given the nature of constitutional change, a public referendum is considered essential. Prime Minister Matteo Renzi has personalized the results of the referendum and has announced that he would resign if the public does not vote in favor of reforms. He wants to get a public mandate for the restructuring program. The announcement of resignation has helped unite the opposition against him. Results of the referendum can thus have dramatic results on entire Europe – and the world beyond it.

If Renzi loses then no one is quite sure of what will happen in Italian politics. A caretaker government can take over until next election or new elections could be called by the president of Italy, Sergio Mattarella. There are chances that center right Five Star Movement, (M5S) may win by majority.  The party, headed by Beppe Grillo, a former comedian turned politician, has vowed in its manifesto that it would call for a referendum on whether Italy should stay in the euro area. Grillo and most constitutional experts in Italy consider Renzi’s political reform agenda to trim Senate merely a thinly disguised attempt at a total power grab. Most legal experts will agree; they cite the balances kept in 1948 constitution important to defeat extremist ideologies like fascism.

Renzi himself acknowledged the risks Italy is facing, telling CNBC: “We’re in a situation where perhaps the Five Star Movement are allowed to lead this country. The people need to understand what voting ‘no’ here means: we learned that in the UK.” This debate unnerves many across Europe – to them it’s a chilling replay of “Brexit”

Italy is a very important member of EU. But the prevailing situation of the country can lead to Italexit which would be another blow to EU after Brexit. Some investors are already predicting the gradual evaporation of the European Union. Jim Smigiel, a US-based money manager at SEI Investments Co., said that “We think the EU will break and that Italy will leave the euro. Until a while ago this was just unthinkable, implausible, but we’re starting to see the wheels in motion, at the very least.” But where do far away countries like Pakistan fit into all this?

Prime Minister Matteo Renzi has personalized the results of the referendum and has announced that he would resign if the public does not vote in favor of reforms. He wants to get a public mandate for the restructuring program. The announcement of resignation has helped unite the opposition against him.

Pakistan enjoys bilateral trade relations with the European Union which have improved in recent years and has been developing a close defense relationship with Italy. It has been lobbying with Italy to block India’s unilateral entry into NSG. In May, Indian defense minister blamed Italy for blocking Indian entry into Missile Technology Control Regime (MTCR). Italian small arms manufacturers had a robust presence in recently concluded IDEAS 2016 in Karachi, Italy’s foreign Minister was recently in Pakistan and Italy’s President is expected to visit Pakistan – trip only delayed by the referendum.

Italy torpedoes India’s entry to MTCR

EU-Pakistan 5-year Engagement Plan is also there to enhance bilateral trade and investment. Pakistan is sending 21.2% of its total exports to European Union which make EU the most important trading partner for Pakistan. Between 2007 and 11, EU-Pakistan trade increased by 4.7% annually. EU has granted Pakistan GSP+ trade preferences according to that more than 76% of Pakistan’s exports, including textiles and clothing, enter the EU duty and quota free. EU has launched trade diversification plan for Pakistan because Pakistan relies heavily on one product category that is Textiles and clothing accounting for around 75% of Pakistan’s exports to the EU.

Renzi’s possible defeat in the referendum can now throw Italy into a political crisis which already has fragile political stability. This can pave the way for Beppe Grillo’s Five Star Movement (M5S) to come into power, the party who has pledged to call a referendum for Euro exit that can eventually lead to Italexit. Pakistan, being a major beneficiary of EU’s trade agreements, may be confronted with significant effects on its economy and diplomacy.

 

Samina Tippu is working as sub-Editor Content at Global Village Space. She was previously working with S&P Global Market Intelligence as an analyst. She also worked on various research projects of USAID, GIZ, World bank, and WHO. The views expressed in this article are the author’s own and do not necessarily reflect Global Village Space’s editorial policy. 

Samina Tippu is working as sub-Editor Content at Global Village Space. She was previously working with S&P Global Market Intelligence as an analyst. She also worked on various research projects of USAID, GIZ, World bank, and WHO. Samina Tippu did her Masters in Political Science and is pursuing MPhil in Peace and Conflict Studies (PCS) at National Defense University (NDU). Her thesis focuses on Impact of Talibanisation on Pakistani society.

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