FX.co ★ Will Italy share the same destiny with Britain?

Matteo Renzi, the Prime Minister of Italy, put to a vote the passage of the law on greater concentration of power in the country. The Prime has no doubt that the government should have much more authority for effective administration of the country.

Taking the third place in terms of economy value in the euro-zone, in recent times poses a serious threat to the EU. It can be explained by the fact that starting on the nineties GDP per capita doesn't increase in the county, and the foreign debt has achieved 133% from GDP. So the political instability of the nation strengthened in this context.

At the local elections in June 2016 the municipal governments of Rome and Turin advocated the movement “Movement of five stars”, the leader of which is the comedian Beppe Grillo, standing for the Italian exit from the euro-zone.

Matteo Renzi supposes that the economic and banking crisis, and also the issue of migration crisis will be solved far easier thanks to greater concentration of power.

The reform proposed by the Prime is set to terminate the political powerlessness and instability, and also to modify the Italian government institutions. Renzi considers that thanks to such changes the national economy will cheer up, that will give an opportunity to save the largest financial institutes of the country, the shares of which show depreciation nowadays. Renzi puts his post on the line and in case of loss he promises to hand in resignation.

In the picture: one of the main places of interest in Italy is the Roman Colosseum.

According to the data of opinion polls, the Italians for the most part do not advocate the Prime. So a little more than 40% of the country are going to vote against his reforms, but almost 36% of the country support the initiative. There is an undecided part of the country, but such people are very few. According to the estimates of the Corriere della Sera newspaper, on December 4 about 55% of the Italians will vote against the reforms, but 45% will support them.

But if will Renzi lose?

In such a case in addition to the falling economy and political crisis it's expected the financial crisis: in the context of the market crash the eight largest banks may turn bankrupt.

Should we wait for Italexit?

The analytics believe that such a result is hardly probable.

In a case of the referendum failure the Prime has a right to deny retiring from a post. However the ”Movement of five stars”, even if it is able to poll enough votes at the pre-term election, in a case of the Prime's retiring, will hardly be capable to build the ingoing administration.