As Europe grows increasingly tense ahead of the Italian constitutional referendum taking place on Sunday, it appears the Italians themselves are not worried at all.
The referendum will ask whether the Italian people would to amend their constitution to weaken the powers of one of its two parliamentary houses, as well as taking power back from the Italian regions to form a more centralised system. However, Prime Minister Matteo Renzi has vowed to step down if a ‘No’ vote wins, making the stakes rather higher.
Most of Europe agrees that Italy, which is teetering on the edge of a banking crisis and has a high level of public debt, can little afford replace its charismatic leader with cobbled-together technocratic government. However, it appears the Italians themselves are less worried.
“Italy knows how to manage instability,” the 74-year-old chief whip for the governing Democratic Party told Bloomberg.
“It won’t be Armageddon if ‘No’ wins. Italy will not collapse. Its institutions are solid.”
Andrea Montanino, a former executive director for Italy at the International Monetary Fund, fundamentally agreed with this approach:
“Markets are over-estimating the impact of a ’No’ vote. There’ll be no disaster – this is an important reform, but it isn’t Brexit or Trump.”
As traders across Europe scrabble to put themselves in a strong position in case the Italian economy collapses, having a knock-on effect on Europe-wide shares, even Renzi himself seems unperturbed by the consequences.
“If ‘Yes’ wins, Italy is stronger, if ‘No’ wins, the risk of a leap into the dark is clear to everyone,” Renzi told newspaper Corriere della Sera in an interview published Friday. “I’m not worried about international markets. I’d be sorry instead for neighbourhood markets – for people who go and buy things, who defend their purchasing power, their savings.”
According to an opinion poll by the IPSOS institute, the Italian voters don’t see that either result will have a lasting impact. Released before a ban on publishing such surveys came into force on November 19th, it said that 47 percent of Italians believe the result of the referendum will not change anything in the country.