Welcome To The Currency War, Part 23: Europe Will Devalue Or Dissolve
No rest for the wicked. With the shockwaves from Brexit and President Trump still reverberating around the world, the established order is bracing for more bad news. Next up is a December 4 Italian constitutional referendum that might end the reign of centrist prime minister Matteo Renzi and replace him with a bunch of anti-euro iconoclasts from the Brexit/Trump part of the spectrum. Here’s an excerpt from a much longer, deep-context Guardian UK article:
As the air of insurgency becomes unmistakable, the technical debate over reforming a 70-year-old constitution is in danger of becoming a sideshow. Perhaps the most disturbing poll for Renzi found last week that only 40% of Italians say they will vote on the reform package; 56% consider their vote to be more a verdict on the prime minister, his government and, by implication, the state of the nation.
If that bigger picture still dominates come polling day, it is hard to see anything but defeat for a man once billed as Italy’s Tony Blair. After 13 years of a flatlining economy, Italians are battered, bruised and looking for somebody to blame. Unemployment is running at 11%, but is close to 40% among the young, who made up the bulk of the 107,000 who left the country last year to seek work abroad. The aftermath of the financial crash is estimated to have wiped out about a quarter of Italian industry. The average family income is less now than it was in 2007.
Traditionally among the most enthusiastic proponents of European integration, ordinary Italians are furious at the EU’s failure to share the burden of the huge migration surge to their southern shores. Lectures from Brussels on the need to cut public spending and balance budgets, given the desperately straitened times, have added insult to injury. It is no coincidence that a current bookshop bestseller – 1960: The Best Year of Our Lives – is a nostalgic evocation of the Italian postwar economic miracle, when the country’s growth was judged to outstrip Germany’s.
As initially strong support for his constitutional reforms has plummeted, Renzi has tried to turn the tide. In an attempt to woo an increasingly Eurosceptic electorate, he has begun to talk tough to Brussels, temporarily abandoning austerity targets and threatening to veto the EU budget unless other member states show more solidarity over migration.