Renzi’s Referendum Loss Could Complicate Brexit

by Bill Emmott | 05.12.2016

Unlike David Cameron, Italy’s prime minister Matteo Renzi had no choice but to call a referendum on his proposed constitutional reforms. But like Cameron he also had no choice but to resign after his heavy loss — by 59%-41%, on a high 65.5% turnout.

The referendum had nothing to do with either Europe or Britain, but its outcome could well complicate Theresa May’s Brexit negotiations even further. Indeed, it adds weight to the case for her to call snap general elections next spring.

The fresh complication is that Renzi’s defeat means that another large EU country – the third largest economy in the euro-zone – now looks destined to have what could be an extremely tense general election just when the Brexit negotiations ought otherwise to be gathering speed: February 2018.

Those negotiations cannot anyway get seriously under way until France has a new president and government next June. They then would be only tentative until Germany has had its own federal elections in September or October 2017.

With French, Dutch and German elections out of the way by next Autumn, Brexit negotiations were due to take centre stage. But now all eyes late next year are likely to be on Italy and on the question of whether the anti-euro Five Star Movement might win the February 2018 general election, and whether the anti-immigrant, and fellow anti-euro, Northern League might come to dominate the country’s centre-right.

The scale of Renzi’s referendum defeat has prompted some Italian opposition leaders to call for bringing those elections forward, but this is considered unlikely, for the mainstream parties are all keen first to pass a new electoral law for the country’s Chamber of Deputies as well as its now reprieved Senate.

More probably, the president, Sergio Mattarella, will seek to appoint a caretaker prime minister from within Renzi’s centre-left Democratic Party, one who should still be able to command a majority within the Chamber thanks to support from centre parties. Top tips include the finance minister, Pier-Carlo Padoan, known as a safe pair of hands, and the culture minister, Dario Franceschini, known as a reformer thanks to his innovative move in 2015 of replacing the directors of all Italy’s top museums and art galleries through competitive tenders.

Of relevance for Britain, however, will be the fresh momentum this referendum result gives to the anti-establishment Five Star Movement, currently neck and neck with Renzi’s Democratic Party in the polls. Unlike today’s typical populist parties, Five Star gains much of its support from young, university-educated voters, which makes it a particularly potent threat.

Five Star, led from outside parliament by the comedian Beppe Grillo, is held back by its rather incoherent bundle of policy positions, one of which is to call a referendum on Italy’s membership of the euro, even though such a poll is widely held to be unconstitutional. But Donald Trump has shown that incoherence is no obstacle to success if the established parties are sufficiently discredited.

Italy itself is not expected to be one Britain’s trickiest negotiating partners over Brexit. But worry in other European capitals about the rise of Five Star and prospects for Italy’s 2018 general election could encourage the other major negotiating partners to present leaving the EU as an unattractive option. This could make them trickier for Britain to deal with.

Perhaps the biggest political lesson of Renzi’s demise is one Gordon Brown would be familiar with: the high price you can pay for failing to grab good general-election opportunities.

Having come to the prime minister’s office in a party coup in February 2014, Renzi could have capitalized on his early popularity by calling a general election. His success in the 2014 European Parliament elections barely three months after he took over should have convinced him.

But like Brown he shied away from calling a snap election, and then frittered away most of his political capital on constitutional reform.

Theresa May, her already slim majority made slimmer last week by the Richmond by-election, yet sitting miles ahead in the opinion polls, should surely take note.

Edited by Geert Linnebank