Next EU Domino Falls as Italy Rejects Renzi

by | Dec 7, 2016 | Articles | 9 comments

nif_italydominoesby James Corbett
December 6, 2016

The scene is becoming familiar, even if the actors change from stage to stage: A political establishment is overturned by a wave of populist anger. Markets panic and a sell-off looks imminent. And then…things stabilize. The government changes, but life carries on.

The latest version of this performance is taking place in Italy where Prime Minister Matteo Renzi has just been unseated after Italians overwhelmingly voted “No” on a constitutional referendum upon which Renzi had staked his political career. The proposed law would have made a series of changes to the composition of Italy’s government, but it was not the technicalities of the proposed changes themselves that motivated over 65% of registered Italian voters to the public, and it was not some great interest in the composition and role of the Italian senate that led 59% of those voters to reject the new rules. Instead, this was seen as a referendum on Renzi and the political status quo in Italy itself.

renzilossRenzi’s loss is the end of Renzi’s brief (but not so brief by Italian standards) tenure as prime minister. It is also a blow to the EUrocats in Brussels, who were hoping that the notoriously recalcitrant Italian public might be persuaded to engage in some mild political reform as an entree to more EU-friendly reforms in the future.

But the vote is a win for Beppe Grillo’s Five Star Movement, a non-party party that has ridden a wave of populist support, going from a joked about internet-only phenomenon at its founding in 2009 to a growing force in Italian politics today. This is also bad for the EU as both the Five Star Movement and the Lega Nord, an anti-immigration party that also helped spearhead the “No” vote, are very much anti-EU, as demonstrated by their support for withdrawing Italy from the eurozone and for re-issuing the lira.

Market response to the fall of Renzi’s government and the rise of chaos should be familiar to those who watched the same reactions post-Brexit and post-Trump. Markets panicked and sold off, with the euro hitting a 2-year low as the results poured in, with signs that the contagion would spread to stocks as the exchanges opened Monday morning…

…But then, as with Brexit and Trump, the sky failed to fall, and the doom-and-gloomers were left scratching their heads. After Italy’s FTSI MIB index tumbled 2.0 points on the news and bonds rose slightly, quickly began exploding back upward. Even Italy’s banking sector — though still in a precarious situation — staged a comeback on the Milan exchange.

In reality, none of these numbers are important. These markets are responding to perceptions and fancies, not facts, and the fact is that there’s no clear sign yet of what this means for Italy’s political future, for its banking crisis, or for anything else.

beppe grilloWhat is clear is that yet another populist movement is knocking on the doors of power and preparing to overturn the status quo. The roots of the Italian people’s anger with the EUrocrats can be traced back to the so-called “PIIGS” disgust at the treatment of Greece during the first bailout “negotiations” in 2010 and the silent coup that parachuted Goldman banker and Bilderberger extraordinaire Mario Monti into the prime minister’s office in 2011 as a sort of fait accompli by Brussels. The Italian people are increasingly fed up with the dictates of the EU and are looking to shake up a political, business and banking establishment that has thoroughly failed them and left their country teetering on a fiscal precipice.

Tellingly, the Five Star Movement has now entered the crosshairs of the same establishment media that brought its guns to bear on the Brexiteers and the Trumpeters. Just as Trump’s election was brought to you by #FakeNews and Kremlin propaganda, so has Buzzfeed just written an article blaming Grillo’s surging Five Star Movement’s success on…you guessed it, “Fake News and Kremlin propaganda“! Hey, if the talking points work, why not use them again (and again and again and again and again)?

It’s still too early to know how this will play out politically, or even when an election is likely to be called. Some pundits posit that a snap election will be called, sending Italians heading to the polls right away; others suggest the election will wait until February. As Bloomberg notes in its own hit piece on Grillo, this biding of time may be necessary to give the establishment time to rig the election against the Five Star Movement:

“The current electoral law automatically gives bonus seats to the leading party in the lower house, to boost stability. That’s spooking mainstream parties, which plan to get together and change the rules before Five Star can benefit in the next election. If the next set of rules favors coalitions rather than individual parties, Five Star may struggle to find the allies required to control the legislature.”

Whatever the case, Europe continues to be pulled apart at the seams even as it keeps reaching toward total centralization. This weekend’s referendum results have only added to that tension.


  1. Yes I’m going through all this in Italy, I cannot bring up very much enthusiasm about anything that happens because I feel the whole world is in a mess as in the USA. But I was definitely in favour of the No. I read the proposals of Renzi’s new constitution and they definitely intended to reduce the already bad situation of the ‘common people.’ I have seen him say he wants to belong to the new world order. But what will come out of this? Bossi almost frightens me more than Berlusconi Bossi would definitely cash in on Farage racism. I originally supported the 5 star movement but Grillo has turned out as a despot even in his own party. Bossi announced a while ago that gays are not welcome in his province.And so we drag on.

    • All of these guys are just playing on the lowest common denominators: fear and rage. People need to start seeing through all of this bullshit.

  2. James Corbett’s article is also seen on “Activist Post”.

    Five Star Movement – Wikipedia

    The M5S is considered populist, anti-establishment, environmentalist, anti-globalist and Eurosceptic.
    Grillo himself provocatively once referred to it as “populist”.
    Its members stress that the M5S is NOT a party but a “movement” and it may not be included in the traditional left-right paradigm.

    The “five stars” are a reference to five key issues for the party: public water, sustainable transport, sustainable development, right to Internet access, and environmentalism.

    The party also advocates E-democracy, direct democracy, the principle of “zero-cost politics”, degrowth, and nonviolence.
    In foreign policy, the M5S have condemned military interventions of the West in the Greater Middle East (Afghanistan, Iraq, Libya) as well as any notion of American intervention in Syria.

    • – Clean Water
      – Sustainable transport
      – Sustainable development
      – Environmentalism

      4 out of 5 Stars are Green.

      What is “degrowth”?

      • I’d wages it’s about downsizing the state apparatus.

      • That is funny. I can’t believe people swallow that tale of global warming. Oh no!! Buy stock in A/C makers.

        Back in the 70’s when I was a young man, there were all these articles about “The Coming Ice Age”. At the time, I remember putting a pencil to it to see how cold Texas would get. Gosh dang!…down here it was gonna get as cold as New York City!

        STAR TREK’s Spock reports in this TV science show…
        The Coming Ice Age – 1978 (90 seconds)

        1958 – Harper’s Magazine
        The Coming Ice Age

        More from Leonard Nimoy 1978…

      • At least they got some bits right

        Every day we are fighting to reduce military spending, especially that aimed at the participation in wars that are camouflaged as peace missions that contribute, not just to the most pitiful annihilation of human life, to the destruction of natural resources, and the mass exodus of peoples and to an infernal military-industrial vicious cycle that increases the climate costs.

        I think these guys have been partially brainwashed.

  3. An Australian economist spoke at the Petroleum Club in Calgary this week:–lessons-for-canada

    Australia are on their fifth Prime Minister in the 9 years that have elapsed since their GREEN Experiment began in 2007. The theme is instability; for every parliament building a revolving door.

    Canada is entering their brave new Responsible-Feel-Good-Environmental Stewardship-World-Leaders era. Australians suffered and revolted at $23 / tonne. We are starting at $50 with talk of $300 by 2030. Canada will soon join the list of countries with revolving door leadership.

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