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Italy’s Referendum Is a Blow to the E.U. on Climate

Italy’s overwhelming “no” vote is likely to undermine the European Union’s efforts on climate, migrants, and Russia.

By Eric J. Lyman


The Quirinale Presidential Palace in Rome, just before the arrival of Italy’s Prime Minister Matteo Renzi to present his resignation to Italy’s President Sergio Mattarella, December 7th, 2016 (Photo: Vincenzo Pinto/AFP/Getty Images)

The failure of a low-profile Italian referendum on a constitutional reform proposal that many voters did not understand is the latest fault line cracking through the foundation of the European Union — a fissure that could have global consequences.

If approved, the measure would have changed the Italian constitution to reduce the size and power of the country’s parliament. The reform was a central goal of Italian Prime Minister Matteo Renzi dating back to the start of his mandate nearly three years ago. Renzi staked his future on it, vowing to step down if it failed.

On December 4th, voters overwhelmingly rejected the idea, with nearly three in five voters voting “no.” And Renzi kept his word, stepping down three days after voters went to the polls.

Since then, most media coverage has focused on immediate impacts: speculation about when new elections would be held, and who was likely to take over next. Those who dug a bit deeper report the ensuing disarray means Italian economic growth, already a laggard among E.U. states, will further slow. The country’s beleaguered banking sector will become even less stable, pushing at least one major bank to the brink of collapse. And after a brief period of political predictability, a country that will soon have its 64th government in the last 70 years will return to its dissolute old ways.

But the enduring impacts of what is happening in Italy could be more significant than any of that.

Italy’s political woes represent a major blow for an already fragile E.U. Among other things, the news from Italy could erode Europe’s ability to continue its leadership on climate change. The developments limit the ability of the 28-nation bloc to confront the worldwide migrant crisis, it cripples long-term prospects for the euro currency, and — perhaps most frighteningly — will embolden Russia’s Vladimir Putin by eliminating the key political counter-balance represented by a strong, united E.U.

“At the very least, Italy will cease to be among those voices calling for greater European unity for the next year or two,” says Gian Franco Gallo, a political affairs analyst with Milan’s ABS Securities. “But the serious risk is that the country’s instability could also help tip the scales toward more populism and nationalism in the E.U., and that would seriously undermine the European experiment and the values it stands for.”

Eleonora Poli, from the Institute of International Affairs, a Rome-based think tank, agrees.

“The growth of populism means countries are prioritizing national interests,” Poli says. “That goes against the notion that certain problems have ‘European’ answers.”

At least at first glance, it is not clear which side of the Italian referendum was the most anti-establishment — something pollsters say made the vote confusing for many Italians.

If the vote had gone the opposite way, it would have reduced the size and power of the Italian Senate. Renzi tried to sell the reform by arguing it would streamline the lawmaking process and over time save hundreds of millions in salaries, pensions, and other costs.

Many voters ended up voting against the measure to strike a blow against increasingly polarizing Renzi. But there was also a fear in some circles that a country prone to strong-armed leaders in the mold of Benito Mussolini and Silvio Berlusconi would make whoever occupied the prime minister’s office too powerful.

“Voting in favor of the referendum, the side Renzi campaigned for, was actually the more disruptive choice,” says political commentator Franco Pavoncello, president of Rome’s John Cabot University. “That is, until you take the potential political consequences into account.”

Pavoncello refers to the likelihood that the outcome could help hand power to the populist Five-Star Movement founded by gregarious comedian-turned-activist Beppe Grillo. Most Five-Star leaders say Italy should abandon the euro currency, for example, and many believe the country would be better off operating outside the E.U. all together.

As soon as the results of the referendum became clear, Grillo called for snap elections. It is possible a vote could be held as soon as February of 2017, though they remain scheduled for April of 2018. The latter date is still most likely, with a caretaker government running things until then. But regardless of when the next vote takes place, Grillo’s forces are well positioned to play a vocal, disrupting role leading up to the vote.

“Grillo’s Five-Star Movement is the real winner of the referendum, and there is every indication that over the next 15 months it will be very difficult to get anything done,” says Mauro Calise, an author and political scientist at the University of Naples. “Renzi took a risk: If he had won, he would have been the most powerful leader in Europe. But with the loss, everything is muddied.”

The Italian vote comes with the world reeling from the anti-establishment, nationalistic wave highlighted by the United Kingdom’s Brexit vote and Donald Trump’s victory in the United States presidential election.

But the Italian referendum does not fit neatly into that narrative: Pollsters say many who voted against the referendum still oppose putting the Five-Star Movement into power, for example. Renzi refuses to head the caretaker government, but if a respected figure steps into that role — the current favorite is Renzi’s Minister of Economy Pier Carlo Padoan — fear of a government collapse could give him the political mandate needed to keep things stable. Additionally, if the consequences of the Brexit vote or Trump administration policies become unpopular, commentators say voters could start to look for more mainstream options going forward.

Still, the Italian result is worrisome for advocates of a united E.U. — and it could get much worse depending on what happens elsewhere in Europe.

There are growing populist movements in Hungary, where two extreme nationalist parties combined to earn more than half the vote in the last two elections, as well as in Denmark, Poland, the Netherlands, and in Switzerland (Switzerland is not a member of the E.U.). But the big worry is France, where the anti-immigrant, euro-skeptic National Front won nearly one-third of the vote in regional elections last year—and where, five months ahead of the vote to select a successor to President François Hollande, polls show party leader Marine Le Pen running neck-and-neck with center-right rival François Fillon.

“Of course it was a shock when the U.K. voted to leave the European Union, but don’t forget that Britain didn’t even join the E.U. until 1973 and it never adopted the euro,” says Eva Giovannini, an author whose latest book is about the rise of nationalism in Europe.

“But if France and Italy, two of the E.U.’s six founding members, start to dismantle things, you could see everything really start to fall apart,” Giovannini continues. “If that happens, I think the euro would disappear, open borders would disappear, and at that point what is left of the E.U. would be an empty shell.”