Europe's Next Unnerving Referendum: QuickTake Q&A

Is Italy Facing a Triple Witching Hour?

The last referendum in western Europe had, to put it mildly, widespread ramifications. The next one could, too. On Dec. 4, Italians will vote on constitutional changes proposed by Prime Minister Matteo Renzi to limit the power of the Senate, the upper house of parliament. At stake is how Italy is run as it endures a banking crisis, economic stagnation, and pressures linked to migration flows. Renzi’s own political fate is on the line as well, as he has promised to quit if he loses the vote. That makes him the next target of the populist wave that swept Donald Trump to power.

1. What’s likely to happen in Italy?

The final rush of public opinion polls before a required pre-election blackout period showed voters leaning toward turning down Renzi’s constitutional reforms. A win for “No” would be a boost for the opposition Five Star Movement, which has bigger goals: a national referendum on whether Italy should abandon Europe’s common currency.

2. What might be the consequences of a ‘No’ vote?

Some see political and economic turmoil, the likes of which haven’t been seen since Renzi took office in early 2014. If Renzi were to resign, he or another premier might lead a caretaker government until early elections, possibly in 2017. The Five Star, which is virtually tied with Renzi’s Democratic Party in polls, would certainly press for an election and business lobby Confindustria says the economy could fall back into recession.

3. What’s the Five Star Movement?

Founded as a maverick web-based movement in 2009, and led by a former comedian, Beppe Grillo, the party has risen to become an insurgent force mixing the EU-skeptic stance of populist parties like France’s National Front with more progressive environmental proposals. It won control of city halls in Rome and Turin in June.

4. What exactly are Italians voting on?

A proposal to reshape the Senate so that it no longer can block legislation indefinitely, gets consulted on fewer matters and loses its power to topple the executive by calling a vote of no confidence in the government. Today’s 315 directly elected senators would be replaced by 100 regional councilors and mayors who are indirectly elected or appointed.

5. What might that accomplish?

Renzi says the changes would reduce the instability that has given Italy 63 governments since the end of World War II and crippled its ability to meet political and economic challenges. A more streamlined legislative process might also have more chance of reforming the Byzantine state bureaucracy and the delay-plagued judiciary.

6. What’s the opposition view?

That Renzi’s reforms would give prime ministers -- him, in particular -- too much power. Ex-premier Silvio Berlusconi has warned the changes would “lead us straight toward a non-democracy.”

7. What are the next populist battlegrounds?

On Dec. 4, the same day as Italy’s referendum, Austria holds an election for the mostly ceremonial post of president. That vote could bring to power the first far-right leader of a western European country since World War II, Norbert Hofer of the anti-immigration Freedom Party. Parliamentary elections on March 15 in the Netherlands will test the appeal of Geert Wilders, who leads the anti-Islam Freedom Party and wants to emulate Britain with a vote on ending EU membership. France’s long flirtation with the anti-immigration National Front will probably get another test in the presidential election second round on May 7.

The Reference Shelf

  • A story on the long odds against Renzi’s economic ambitions.
  • Bloomberg View editorial writer Therese Raphael says Italy has a chance to buck the Brexit-Trump trend.
  • Populists are eyeing Europe’s next dominoes.
  • A Bloomberg View editorial on the case for Renzi’s reforms.
  • A QuickTake Q&A on the problem with Italy’s banks.

— With assistance by Lorenzo Totaro

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