Over the past five decades, the Italian economy has been choked with red tape and ineffective rules that have seen it become a perennially sick nation of Europe. Nine years after the financial crash, Italy’s output remains 8 per cent lower than before. And its membership of the Eurozone has done little to improve its performance. If anything, the state of Italy’s finances, its over-extended banking sector and its high levels of state debt pose the next big risk to the common currency.
Come Monday morning, when all of the votes have been counted in a referendum and Italy’s Prime Minister, Matteo Renzi, knows whether his gamble has paid off, it will be the turn of European markets to react. He called a ‘yes-or-nor’ plebiscite on government-championed constitutional reforms and as occurred in the United Kingdom first with the Brexit vote, and in Colombia with the vote on the peace accord with Farc, the ballot is taking on the characteristics of a stamp of approval on the establishment’s performance. A win by the ‘No’ camp on a centrepiece reform of the government is expected to trigger Renzi’s resignation.
Austrians too head to the polls in a rerun of the presidential election tomorrow, with a clear choice between different ends of the political spectrum: Alexander Van der Bellen, a former Green Party leader, standing as an independent; and Norbert Hofer of the anti-immigration Freedom Party.
While on the surface, the ballot is for a largely ceremonial post, the contest has exposed deep divisions within society given the stark ideological differences between the candidates on issues such as Austria’s place in the European Union. Loss in Italy and a Hofer win in Austria will once more put the EU experiment under intense scrutiny.
