Renzi quits; Italian populists seek quick vote to win power

2016-12-05 18:39
Matteo Renzi (AP)

Matteo Renzi (AP)

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Rome — Italian voters dealt Premier Matteo Renzi a stinging defeat on his reforms referendum, triggering his resignation announcement and galvanising the populist, opposition 5-Star Movement's determination to gain national power soon.

"I lost, and the post that gets eliminated is mine," Renzi said on Monday about an hour after the polls closed. "The government's experience is over, and in the afternoon I'll go to the Quirinal Hill to hand in my resignation," to President Sergio Mattarella.

Besides the "anti-establishment" 5-Stars, the outcome energised another "anti" party, the anti-immigrant Northern League, an ally of French far-right leader Marine Le Pen, a candidate in France's presidential race.

In voting No, Italians also delivered a rebuke to Italy's industrialists, banks and other establishment institutions, which had staunchly backed the referendum. The anti-reform victory, which could spook investors, comes just as the government had made some inroads in cutting the staggering rate of youth employment and while Italy's banks have urgent need for recapitalisation.

During the campaign, the risk of political instability in Italy, Europe's fourth-largest economy, triggered market reaction, with bank stocks sinking and borrowing costs on sovereign debt rising.

But some analysts predicted the political crisis sparked by Renzi's exit would be short-lived, as politicians focus on lining up support for a new electoral law they view as boosting their parties' chances for whenever elections are called.

Wolfango Piccoli, a London-based analyst and co-president at Teneo Intelligence, said the main risk of Renzi's "devastating defeat" will lie in the medium term.

That could see "a prolonged muddle-through period, the emergence of an ineffective patched-up coalition government in the post-election phase and continuously poor economic performance," Piccoli said in an emailed comment.

'Arrogance lost’

The 5-Star Movement, led by anti-euro comic Beppe Grillo, spearheaded the No camp on the constitutional reforms, a package aimed at updating Italy's post-war Constitution that Renzi had depicted as vital to modernizing Italy and reviving its economy.

Characteristically confident - detractors say arrogant - Renzi, 41, and Italy's youngest premier, had bet his political future - or at least his current premiership - on a Yes vote win, and campaigned hard for a victory in recent weeks to confound opinion polls indicating that it would likely go down to defeat.

With votes counted from nearly all the polling stations in Sunday's referendum, the No's were leading Yes votes by a 6-to-4 margin, Interior Ministry data indicated. The turnout of 67% was especially high for a referendum, and more in line for a vote for Parliament.

"Today the caste in power lost," said a 5-Star leader, Luigi Di Maio. It was a sharp retort to Renzi's characterising the reforms as an opportunity to shrink the "caste" of elite, perk-enjoying politicians by reducing the numbers and powers of Senators.

"Arrogance lost, from which we'll learn many things in forming our team for government and our platform," Di Maio said. "Starting tomorrow we'll be working on a government of the 5-Stars, we'll involve the energies and the free persons who want to participate."

The 5-Stars' constituency is largely internet based, and bills itself as anti-establishment.

"The man alone at the command doesn't exist anymore, but the citizens who govern the institutions" do, Di Maio told a news conference minutes after Renzi conceded.

Mattarella, as head of state, would have to decide whether to accept Renzi's resignation.

Renzi is widely expected to be asked to stay on at least until a budget bill can be passed later this month. Then he or some other figure, perhaps from his Democrats, Parliament's largest party, could be asked to lead a government focused electoral reform.

The current electoral law would grant the biggest vote-getting a generous bonus of seats in Parliament.

Renzi's Democrats and the centre-right opposition of former Premier Silvio Berlusconi want the law changed to avoid risking that the bonus would go to the 5-Stars should they lead the vote-getting.

Elections are due in spring 2018, but Renzi's resignation could prompt their being moved up a year.

Read more on:    matteo renzi  |  italy

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