A Tale of Two Votes: Different Messages from Austria and Italy

Yesterday, Austrians and Italians headed to the polls for two different reasons. Austrians were voting in the run-off election to elect their next President. The choice was between Independent candidate and former Green Party and university economics professor politician Alexander Van der Bellen, and far-right Freedom Party leader Norbert Hofer who led a populist revival on the issues of immigration, Brussels and the euro. In what many thought would be a close contest, Van der Bellen won resoundingly with nearly 54% of the vote to Hofer’s 46%. Hofer conceded early, and Brussels celebrated Van der Bellen’s victory.

In the case of Austria, the choice was clear. A pro-EU, progressive Green versus an anti-EU, reactionary populist. Austria is one of the most pro-EU countries in the bloc, making Van der Bellen’s victory not wholly surprising. European Council President Donald Tusk tweeted his congratulations to the President-elect, urging the importance of “European unity” in the face of current crises.


In Italy, the choices were less clear. Italians were asked to vote on constitutional changes that would streamline the democratic process, reduce costs, and make it easier for Parliament and the Cabinet to reform the economy. However, the 5-Star movement, a populist political party that is polling very high in Italian opinion polls, led the NO effort, making this referendum about Matteo Renzi and the EU instead of the question at hand. The Prime Minister didn’t help the situation by saying he would resign if the YES campaign lost. Many in the European media have tried to spin the Italian referendum as something more than a simple constitutional question, as an issue regarding Europe. That’s not true. This was a referendum about Renzi’s premiership and his handling of the Italian economy and the refugee crisis.

Renzi lost by a nearly 20% margin- 59-41. He offered his resignation immediately, which is a shame. Renzi was, for European liberals, the counterbalance to Merkel and Schäuble, Merkel’s conservative finance minister. With a banking crisis looming over Italy and Monte dei Paschi likely to be nationalised when a new government is formed, maybe soon. However, the 5-Star Movement, which has called for a referendum on Italy’s membership in the eurozone and the renegotiation of the country’s staggering public debt — moves that could roil the global economy and reignite the euro crisis, likely leading to the dissolution of the single currency zone and perhaps the European Union, has never looked to be closer to power.


No one knows if an election will be called in Italy to legitimise any PM who comes to power after Renzi, but if there is, the 5-Star Movement could conceivably win a plurality, if not a majority. They are popular in Italy, famous for pledging to fight corruption and hold a referendum on the euro. Though unlikely, a collapse of the Democratic Party’s government would create a political crisis that could endanger the stability of the Italian economy. Silvio Berlusconi’s Forza Italia would be wiped out if elections were held in the next few months, making the 5-Star Movement the largest party on the Right.

The euro opened at more than 1% down in early trade against the dollar to its lowest level since 2015, but has recovered to be up 0.4% against the dollar at $1.070. The President of Italy, Mr. Mattarella, is widely expected to opt for the formation of a caretaker government to deal with several urgent issues, including the passage of the 2017 budget and a banking crisis that threatens to boil over in the coming days. That government would ferry the country to new elections, which could be brought forward from their current timetable of spring 2018. The economic and financial concerns raise the likelihood that Mr. Mattarella will chose Mr. Padoan, the respected finance minister, as the new premier.

In the meantime, EU27 leaders will meet on 15 December to discuss migration, security, economy and youth, and external relations. Neither Mrs May nor Mr Renzi will be present, both due to referenda in their respective countries.

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