Rome: Italian Prime Minister Matteo Renzi faces a critical national referendum on Sunday. As the populist wave threatens to crush him and plunge Italy into a political crisis, this referendum is seen as crucial to the future of the prime minister.
After Brexit and Donald Trump’s victory, fears are rising that Italy may be the “next domino to fall.” What should be an inward-looking referendum on whether to overhaul Italy’s ossified political and electoral system has taken on much broader import. Financial analysts warn of a potential banking crisis, and pro-Europe supporters fear that a “no” vote in the referendum could accelerate the populist movement across the European bloc, the New York Times reported.
If, as the polls suggest they will, voters reject Mr Renzi’s plan to streamline parliament, the centre-left leader has said he will step down.
If Mr Renzi does step aside, it could open the way for opponents who have threatened to carry the continent’s fourth-largest economy out of the euro currency zone, according to the New York Times.
This could destabilise the already-shaky Italian economy and have serious implications on the troubled banking system, which has been in crisis for a decade.
