Italy’s Referendum: Missed Opportunity for Reform and Prologue to a New Crisis

Since   the   Italian   voters   rejected   the   proposal   for   an   important   reform   of   the   Italian Constitution by means of a referendum held on December 4, 2016, the former Minister of Foreign Affairs Paolo Gentiloni has been appointed as the new prime minister, the majority in Parliament being substantially the same of the former government. A surprising   nearly   60 percent   of   the   voters   decided   to   say   no   to   the amendments   approved   by   the   Italian   Parliament, and based on a draft inspired by Prime Minister Matteo Renzi’s government and by his center-left Democratic Party. This referendum was called because the constitutional law had not been approved by a qualified majority of two-thirds in each house of the Italian Parliament in the second vote, as provided for in article 138 of the Italian Constitution. The story of the failed constitutional reform can be qualified as a missed opportunity. There is undoubtedly need to  reform some parts  of the Italian  Constitution, which, without being necessarily obsolete, can be seen as one of the causes of   the dysfunctional law-making procedure, with serious consequences for the activity of the legislature. Reform by Parliament and by referendum failed, but Italy’s government and legislators have to find a way to make reforms happen soon. If they do not, the risk will be to take the risk that anti-European and anti-elite sentiment will continue to grow among the Italian people.

The rejected constitutional reform would have changed the composition, the role, and the powers of the Senate. It would have adapted legislative procedure, and divided differently State and regional responsibilities, abolished the CNEL (National Council for Economics and Labour) and repealed the word “provinces” in the Constitution. That reform also involved some changes to the election of the President of the Republic and the establishment of a new threshold of 150,000 (instead of 50,000) voters for the initiative to propose new legislation. The grounds of the No vote be found in several different causes: the growing distrust  of   Italians   in   their   political   elites,   the   overestimation   of   public   support   for   the  government, the apparent lack of a clear link between the economic situation and the changes in  the  Constitution, and  finally the poor drafting  of  some  parts  of   the  proposed  reform. Moreover,   Renzi’s   decision   to   tie   his   fate   to   the   constitutional   reform   was,   in   the   final analysis, a mistake. The approach turned the referendum into a vote of confidence to the government given directly by the people and not by Parliament. That said, it would be premature to infer from the result of the referendum that no other constitutional reforms will be proposed in the foreseeable future. The necessity for change still remains and cannot be easily ignored. Thus, a new opportunity for reform might arise when new governments will be inevitably confronted with the same political and institutional problem. One can only hope that more attention will be given to the quality of constitutional legislation and to the search of a broader agreement.

For now, Italy faces a new political crisis, even if a new government is in place. The new   government   will   probably   ensure   continuity   with   the   previous   one,   in   particular concerning foreign and European affairs. In spite of some criticisms, the new government can rely on a parliamentary majority that can give it the opportunity to rule the country in this difficult time. Even so, new problems can easily arise in economic and social domains. One of the main issues seems to be the adoption of a new electoral law in view of possible upcoming elections. Some political parties (like   the   Five   Stars   Movement) favor new political elections as soon as possible. Others would prefer to wait for the adoption of a new electoral law, as at present there are two different sets of electoral rules governing the election of the Senate and of the Chamber of Deputies. On January 24, 2017, the Constitutional Court will hold hearings on the conformity to the Constitution of the so-called Italicum, the electoral law still into force. The final decision of the Court will follow. After that date, in principle elections would be possible, before the end of   the   parliamentary term in 2018, on a basis of a proportional system, which is not unanimously accepted. In the light of the recent debates among political parties following the referendum, the likely outcome seems to be an agreement on a new electoral law during the first semester of 2017. 

In both cases  political elections in a short-run or establishment of a new coalition government after elections at the end of the parliamentary term, some serious threats continue to menace and jeopardize the Italian economic system. As pointed out by many observers, the Italian GDP per head is still stuck at the level of the late 1990s and the labor market is disabled. In addition, Italian banks are jammed with non-performing loans and the most arduous and dangerous problem continues to exist: the second-highest debt load in the Eurozone. Nevertheless, a consequence of the referendum could be the opening of a political debate that would take into account  more seriously  the  strong message of   disapproval coming from Italian   voters, reversing the attempt of constitutional reforms in awareness of structural economic changes that Italy urgently needs. In a mid-term vision, these changes can probably only be made by a big coalition of non-populist political forces, taking also into consideration that a pure proportional or a partially   proportional   electoral   law   (the   most likely   future electoral system in Italy) would impose, in a certain way, the establishment of an alliance between the center-left (which currently has the majority in both houses of Parliament) and the center-right, or some groups belonging to the center-right area. Any prediction could be contradicted by new political clashes, even inside major parties .In the present crisis conditions, that alliance would have to counter extremist political parties, which already declared that they would not hesitate to ask for a referendum on the euro (even if the majority of Italian voters does not seem to be in favor of that option). The capacity of a more traditional political approach to respond under increasing pressure will be the keystone of later more substantive and substantial developments in the economic and social policies. Without significant results, the peril of anti-European sentiment or fatal indifference will increase.

Photo by Diliff.