THE BLOG
11/30/2016 01:42 pm ET Updated Dec 01, 2017

Italy's Upcoming Referendum Could Impact Europe's Future

Simona Granati via Getty Images

Italy's constitutional referendum will take place on Sunday, December 4, along with the Austrian presidential elections. These events will conclude a series of key elections across the world, among them the Tsipras-led Greek referendum, Brexit, and finally, the U.S. presidential elections, which led to Donald Trump's victory.

The Italian vote carries much importance as well. It comes at the peak of a piercing campaign, and it will dictate the destiny of Prime Minister Renzi. He has all his chips riding on the "Yes" vote, and the outcome of this election will affect the future of Europe, Italy, and the Democratic party.

Italy is one of the countries that founded the EU. It has received special attention due to its enormous public debt, and a "No" to one of the key reforms requested by Brussels could be the umpteenth jolt to a wobbly Europe. A "No" vote could be the final blow to the Euro as well as a leap into the dark for Rome, with its typical ungovernability.

On the other hand, the "Yes" vote wouldn't necessarily bring about a phase of peaceful growth; actually, it could usher in a period of vendettas, and may even lead to more dramatic early elections. Victory for the "Yes" vote is unlikely, but not impossible, considering the rise of "black swans" across various political horizons.

Ironically, Europe has been the main bullseye for the prime minister, who is behind in the polls, with an economy that hasn't taken off, and whose attacks against European bureaucrats is one of the few mantras that have been able to excite Italian voters. Brussels is an easy target, and nationalism is always a loaded weapon. But we don't know if it will be enough. Nor do we know if the alarm bells sounded by international observers will be able to help Renzi's cause on behalf of increasingly worried markets.

  The outcome of this referendum will have a bearing on Renzi's Democratic party as well as on Europe and the Italian government at large.

The proposed constitutional reforms arose out of just premises -- who wouldn't want the Italian institutional system simplified? However, the reforms have inspired much controversy. Let's look at the most important and divisive point of this referendum: there are those who demand an end to the so-called "perfect bicameralism" -- to keep a law from bouncing back and forth for eternity between two houses tasked with similar responsibilities -- and those who have yearned for the abolition of the Senate.

This whole issue, which at first glance could seem overly technical and unexciting, certainly gained steam when Renzi made it personal. His disastrous statement: "If the No-vote wins, I'm resigning," grabbed the attention of many of his adversaries, who now regard the popular vote as a chance to get rid of the prime minister.

His classic enemies, including populist parties such as Salvini's Northern League and Beppe Grillo's Five Star Movement, have now been joined by groups that have not appreciated Renzi's all too coarse style.

Eminent constitutionalists who were excluded from the revision of this document were certainly not flattered by the prime minister, to say the least. This includes parts of the left and the center left. For instance, former president Giorgio Napolitano, while initially a supporter of the "Yes" vote, did not appreciate the way Renzi made this race personal. Even Berlusconi is now supporting the "No" vote.

As stated above, the outcome of this referendum will have a bearing on Renzi's Democratic party as well as on Europe and the Italian government at large. With Renzi as its secretary, the party itself is fragmented over these reforms. Former leaders such as Pierluigi Bersani and former Prime Minister D'Alema are heading the fight against the "Yes" vote, in a battle that foreshadows future rifts within the party. No matter what, this party will come out of this hurt, at risk of being split, and full of resentments and possible vendettas.

At first glance, this would seem to be the classic all-against-one scenario -- but that's not totally accurate. Not everyone is against the prime minister's reforms. Retirees and and entrepreneurial associations, both of which make up sizable constituencies, are not against the reforms. If Renzi manages to convince his voters that his plans would bring about change, he could have a shot.

With Trump's win, the music has changed a bit. Populists have regained strength, and Renzi has tried to sell himself as an anti-establishment figure. The problem, however, is that by now he is probably viewed as part of the establishment.

Lastly, let's not underestimate those who will abstain from voting. The discourse over this referendum could have given voters the impression that this is more of a gang war than a discussion about what's best for the country.

The mobilization of undecided voters -- and of Italians abroad -- will be a deciding factor in this game. The only certainty is that on December 5, Europe, Italy and the Democratic party will no longer be the same.