On December 4, Italians will be called to the polls to approve or reject the constitutional reform, which has been monopolizing the Italian political debate for some months. It may be useful to analyze the economic-political scenarios that will be created in case of victory of the "Yes" or "No". Indeed, the outcome of the vote will have a decisive impact on the future of our country and, in part, also on that of the European Union.
The tones of the debate on the constitutional referendum were ignited by Matteo Renzi's words last April, when the Prime Minister spoke of resigning in the event that the "No" vote won, only to retract a few months later. However, the hypothesis of early elections seems to be concrete even in the event of a victory of the "Yes", and there are two reasons: firstly, Renzi could take advantage of the favorable political climate to go and win the elections in the spring and have a solid majority in Parliament; secondly, governing for another two years with a Senate repealed by popular vote would be counterproductive for Renzi himself, who could carry out his reform program much more easily once the equal bicameralism is over.
The political consequences of a "No" victory in the constitutional referendum are more difficult to imagine. Despite the Prime Minister's “backtracking”, a rejection of the constitutional reform would inevitably lead to the fall of the current government and new elections in the spring. In this case, the Movimento 5 Stelle would have a good chance of winning, driven by the political climate favorable to Italicum, which in the run-off would also lead to the votes of the center-right and the Northern League towards Beppe Grillo's party. If this scenario were to materialise, a referendum on leaving the euro could be the next step, and it was Juncker himself who admitted that the risk of a defeat would be very high.
Precisely for this reason, Brussels is also eagerly awaiting the outcome of the presidential elections in Austria, where the far-right candidate Hofer, leading in the polls, has made the referendum on leaving the EU one of the pillars of his election campaign. With regard to the financial consequences of the vote, the scenarios that lie ahead are radically opposite: in the event of a victory of the "Yes", the climate of optimism on Italy's political future would have a positive effect on the financial markets, therefore on the propensity to consume and on the attractiveness of Italy in terms of domestic and foreign investments. If the "No" vote wins, Italians would resign themselves to the most serious loss of income in terms of per capita GDP in recent centuries (-11,1% from 2007 to today, only Cyprus and Greece have done worse in the EU) , and instead of looking at the country's real problems, a debate would open on leaving the euro, with the consequent instability that would be created on the financial markets (as early as 5 December).
Instability that would also be reflected in our banking system, whose crisis, previously ignored, is now there for all to see. Non-performing loans on the balance sheets of our credit institutions and low profitability are the main symptoms of system vulnerability, and a banking crisis would have a devastating impact on an economy that is struggling to grow and which has to bear a public debt exceeding 132% of GDP. To conclude, if the "Yes" vote wins, Italy could finally have a constitutional reform that has been awaited for decades, which would touch on two key issues such as bicameralism and the distribution of powers between regions and the state. The greater political stability that would ensue (Italy has had 63 governments in the last 70 years), would allow us to return to politics, to diagnose the problems of our country and to try concretely to solve them, without resorting to a system that led to excessive political fragmentation and out-of-control public spending.
In the event of a victory for the "No", in addition to having lost an opportunity for change that is difficult to repeat in the coming years, Italy would find itself facing a situation of very serious political and economic uncertainty, at national and Community level.
