Will Italy Be Next To Quit The EU?

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By Harry Phibbs | 6:01 am, November 30, 2016

It used to be that Euroscepticism was derided as a purely British outlook. Margaret Thatcher’s voice was powerful but lonely in articulating it at EU summit meetings. UK concerns about sovereignty were denounced as parochial and backward looking.

Eurocrats asked: why did the British always have to be the party poopers slowing the exciting journey to EU superstate? Those who wanted a Europe of independent free trading nations were derided as “Little Englanders” – or, worse, as xenophobic.

But rapidly it is becoming the Eurocrats who appear old fashioned and isolated. It looks increasingly likely that the Brexit vote will be the catalyst for the whole rotten EU empire to come crashing down.

On Sunday the Italians will have a chance to join the popular uprising. Notionally the constitutional referendum they are voting in is very dull and nothing to do with the EU. Their prime minister Matteo Renzi wants to change the parliamentary system to curtail the power of the senate (the upper house).

It would also cease to be directly elected. Really it is form of displacement activity that would do nothing to deal with that nation’s woes.

But the significance for the EU is that Renzi has pledged that he would resign if it is defeated. In March the opinion polls showed a huge majority for accepting Renzi’s proposal. Yet the most recent polls show a small majority rejecting it.

Tantalisingly the Italians are forbidden from publishing polls during the two weeks ahead of a vote. In any case, polls these days seem as much use as weather forecasts or horoscopes. So who knows what will happen.

It would not automatically follow that if Renzi resigns there would be an immediate general election. Some technocratic error might last a few months. Whether such a fudge would placate anti-establishment forces is another matter.

The opposition Five Star Movement would hold a referendum on leaving the Euro if it formed a government. Often Five Star are attacked as populists. But then Dan
Hannan has defined populism as “something that other people like, but I don’t.”

Nor a Five Star alone. Lega Nord, a regional party from northern Italy, also wants to leave the Euro. Forza Italia, Silvio Berlusconi’s old party, is also becoming increasingly anti-euro.

Who could argue that membership of the Euro is proving a success for Italy? The country’s GDP has shrunk by 8% since 2008, the rate of youth unemployment is nearly 40%. Government debt is among the highest in the world – as measured against the country’s wealth. In other words Italy is broke – and, being trapped inside the Euro, lacks the inflexibility to recover.

Barack Obama has backed Renzi’s referendum proposals – so that is probably the kiss of death.

Can the Euro even survive long enough for the Italians to hold a referendum? It is a failing currency. Greece was forced to become a kind of EU colony, but Italy is five times bigger.

It will not be smooth or easy. The Italians had better get ready for Progetto di Paura – their establishment’s own version of Project Fear which will be even more blood-curdling that the dire warnings given to the British.

Yet as the Italians contemplate their experience of the EU and the Euro – and consider the experience of their Swiss neighbours who have prospered without such entanglements – they may look forward to their own Independence Day.