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Renzi Looks to Ends of Earth for Referendum Votes to Save Job
This
article by Lorenzo Totaro, Chiara Albanese and Marco Bertacche for Bloomberg may be of interest to subscribers. Here is a section:
A little more than five weeks before the ballot on reforms that Prime Minister Matteo Renzi says are needed to streamline the government, Italy’s main pollsters signal that voters are almost equally split, with the naysayers slightly ahead. While the surveys don’t take into the views of overseas voters, history suggests they might break in favor of Renzi. In the 2013 general election his Democratic Party was their No. 1 pick.
The most likely scenario is a victory for “No” by a small margin, JPMorgan economist Marco Protopapa wrote in a note on Friday. London-based Protopapa added that faced with a defeat, Renzi would likely offer his resignation to the president of the Republic, who would reject it and invite the premier to verify that he has the support of a majority in the parliament.
Eoin Treacy's view
Renzi has already rolled back on his commitment to leave office if the referendum does not pass and little wonder considering how close the polls are. An Italian subscriber sent through this
article which highlights the fact a number of politicians are beginning to float the idea of delaying the plebiscite to allow for greater focus on managing the response to last weekend’s earthquakes.
In normal circumstances a country would declare a state of emergency and potentially even a supplemental budget to ensure that the devastation and human suffering from such a large earthquake are dealt with quickly. However Italy is operating within the confines of the fiscal constraints imposed by its membership of the Euro so there are limitations on what the government can do.
It is therefore an open question whether the nation will rally behind the government to get the clean-up and reconstruction underway in a prompt manner or whether this event will further highlight the loss of sovereignty Eurozone members have endured.
The Italian stock market index has now encountered resistance in the region of the trend mean and a clear upward dynamic will be required to signal a return to demand dominance.
Italian government bond yields broke emphatically above the trend mean last week and have increased again today. A resumption of ECB buying will be required to stem the slide in prices as a poll today suggests Italy is now viewed as more likely to leave the EU than Greece.
