Future of the Eurozone Could Be Decided on December 4th in Austria and Italy
Is this the most important time in the EU’s history?
Italy and Austria take votes at the beginning of December that could destabilize or even end the euro and the EU itself.
This is part of a destabilizing trend that we’ve long noted and anticipated, some 16 months ago with the destruction of the EU’s Schengen agreement that used to stand for free-travel throughout Europe.
The two potential upheavals are the Italian referendum and the Austrian election, both of which are set to occur on the same day, December 4th.
Not long ago, we mentioned how a collapse of the troubled Italian banking giant Banco Monte dei Paschi could prove to be problematic for the Italian economy and in turn, the entire Eurozone.
There are also three other mid-sized Italian banks, Popolare di Vicenza, Veneto Banca and Carige, which are in varying levels of distress, but additionally pose direct threats to the Italian financial system.
However, the precursor to bank failures In Italy is this upcoming constitutional referendum. The basis of this reform would lessen the number of Senate seats from 321 down to just 100 politicians. (Which, to be truthful, is still exactly 100 too many.)
Another proposed change has to do with the way Senators are elected. The new proposition is to have the Senate members be made up of “regional councillors” who will not be salaried as most of the current Senators are.
One more stipulation will allow the president to appoint five senators to serve for seven years each – in hopes of checking the power of the five current lifetime Senators.
The outcome of this referendum is particularly significant because it is likely to be a deciding factor in whether or not the populist Five Star Movement gains yet more power.
Stronger support for this party, which has vowed to carry out a new referendum for an “Italexit”, is certain to create a great deal more uncertainty in markets. International financiers are already sweaty palmed thinking about this disastrous prospect in light of the current prime murderer, Matteo Renzi’s threat to step down should the referendum fail.