Europe’s embattled political establishment lost another round Sunday in its effort to thwart the anti-elite movement, as Italian Prime Minister Matteo Renzi resigned following a voter rejection of his constitutional reforms. But a center-left presidential candidate in Austria handily defeated his far-right challenger.
The thorough rejection of Renzi’s efforts to streamline lawmaking was a significant boost for the country’s surging anti-establishment forces just weeks after Donald Trump prevailed in the United States. Renzi’s loss also risked unleashing financial upheaval in Europe’s third-largest economy, as Italy’s weak banks struggle to contain the fallout.
A populist takeover of Italy is still an uncertain prospect, since Renzi’s center-left Democratic Party remains in control of the parliament and national elections do not have to be called until 2018. But much will depend on the makeup of the next government and how the anti-immigrant, euroskeptic parties capitalize on their success.
“I have not managed to reach victory,” Renzi said early Monday, conceding defeat at the Palazzo Chigi, his official residence. “My government ends today.”
The lead opposition to Renzi, the insurgent Five Star movement, ran a spirited campaign against the prime minister’s reforms, joining forces with an unlikely cross-section of allies, including some in Renzi’s own party. Many establishment politicians also questioned whether the reforms truly made sense as the country contends with grim prospects for growth and a wave of migration from Africa.
What comes next will depend partially on Italian President Sergio Mattarella, who is charged with picking a new person to try form a government and whether to hold early elections. Elections are a key demand from the Five Star movement, which is running a close second to Renzi’s party in the polls. The euro dropped one percent against the dollar in early Asian trading following the release of initial exit polls, but financial analysts cautioned against panic.
Renzi’s anti-establishment opponents were trying to capitalize on a wave of skepticism about the ability of elites to deal with globalization and the long, painful effects of the economic crisis that started nearly a decade ago. The Trump victory last month cheered the Five Star Movement, an insurgent anti-euro force that has support on the left and the right and is led by the caustic comedian Beppe Grillo.
Italians were technically just giving an up-down nod to the restructuring package. But the referendum to streamline the political system and diminish the role of the Senate long ago turned into a broader vote of confidence in Renzi, the youthful, Coke-chugging leader who portrayed himself as a lone warrior against Euroskeptic forces.