The constitutional referendum in Italy
Many analysts see the vote on constitutional reform in Italy as more significant than Brexit.
To approve a proposed law, the current system in Italy requires approval of both the Senate of the Republic (the upper house of parliament) and the Chamber of Deputies (the lower house). The former Prime Minister Matteo Renzi campaigned for removal of the power from the Senate, which would have meant that proposed laws would only require the approval of the lower house of parliament. Mr Renzi felt that the change was absolutely necessary.
He wanted to cut the number of seats of power, but instead, it is the seat of the Prime Minister that just became vacant. Mr Renzi’s resignation opens the door to early elections next year, with possibility of an anti-Euro party winning the election.
And what effect does the Italian referendum have on the rest of Europe? As the Italian voters rejected constitutional reform, and accordingly, traders reacted to Italy’s referendum, the Euro fell to a 20-month low. European markets are becoming quite nervous, so it may be time they build some immunity to political risks and get used to the shake up of the European Union.
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