The Implications of a ‘NO’ vote in Italy

The Implications of a ‘NO’ vote in Italy

Italian Referendum – The beginning of the end? The thoughts of Gilt Edge on the ‘No’ vote in the Italian referendum.

On Sunday we witnessed the Italian people reject Mario Renzi’s referendum proposal by a massive 60% of the population. We can now explore how this result has impacted on Global Investment markets.

The referendum question consisted of three parts:

1. The introduction of a new pathway for laws to be introduced into the constitution

2. Reduce the number of senators from 315 to 100 and the number of elected politicians from 945 to 730 reducing the cost of parliament which currently is the most expensive in all Western Democracies

3. Significantly reduce the power of the Senate (Upper House) which currently holds the same power as the Lower House thus duplicating powers between the two houses

Despite these proposals being positive for long term growth opportunities, the Italian people have seen the vote as an opportunity to voice their frustration of the Italian establishment. As with the Brexit Vote and the recent US Presidential Elections, the electorate have again voted with an anti-establishment voice, ignoring the benefits these proposals would have had on the Italian political system.

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