Italian Referendum: It's a "No"
December 5, 2016
Italy has voted “no” to the proposed changes in 4 December’s Constitutional Referendum, rejecting an essential part of Prime Minister Renzi’s project connected to the electoral reform. This outcome will bring, in our view, a phase of relative uncertainty, with Renzi’s resignation announced last night and the possible formation of a technical government to renegotiate the electoral law and re-boost the reform momentum. Early elections do not seem the most likely scenario at the moment, as parties have strong incentives to form a coalition and complete the electoral law before the country goes to the polls once again. Overall, we expect that political and economic stability in Italy will be preserved, in the medium term, but in the short term a new phase of volatility will likely open up.