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  • In December 2016, Italian voters rejected a referendum on stripping one of the country’s

  • two parliamentary chambers of most of their powers.

  • In advance of the referendum, Italy’s Prime Minister, Matteo Renzi promised he would step

  • down if it failed.

  • Now that it has failed, and he has announced his resignation, many fear for Italy’s future,

  • especially its membership in the Eurozone.

  • So, could we soon see something of an Italexit or a Quitaly?

  • The referendum, put forth by Prime Minister Renzi, was intended to make the government

  • function more efficiently, by reducing the bureaucratic power of the Senate.

  • But an opposing populist party, known as the 5-Star Movement, campaigned for voters to

  • voteNo”, arguing that the decision would give the PM and half the Parliament too much

  • power.

  • The incredibly high voter turnout and failure of this referendum points to the growing popularity

  • of the 5-star-movement, which was started by an Italian comedian, and supports issues

  • such as public water, sustainable transportation and development, environmentalism, and a right

  • to internet access.

  • The resignation has opposition parties calling for parliament to be dissolved, and snap elections

  • to be undertaken, which could push the 5-star movement to power using populist momentum.

  • Members of the party have already entered parliament, and one became the first female

  • mayor of Rome earlier in 2016.

  • The party has repeatedly called for a referendum on dropping the Euro as the country’s currency,

  • citing restrictive budget rules from the EU.

  • Instead they’d prefer a national currency, like the former Italian lira, which was fully

  • replaced by the Euro in 2002.

  • But even if the 5-star-movement does secure a majority in parliament, and is able to hold

  • such a referendum, would that be enough to get rid of Italy’s Euro?

  • Probably not immediately.

  • The first issue is that the Italian constitution, while allowing referendums, does not allow

  • them on international treaties.

  • This would not only include dropping the Euro, but also separating from the European Union,

  • if it came to that.

  • For a referendum on international treaties to be valid, the party would need either a

  • two-thirds majority in parliament to change the constitution, or an equivalent coalition.

  • At the same time, polls show that only about 15% of Italians are even interested in leaving

  • the Euro, so changing the constitution for this reason could end up being a waste of

  • effort.

  • And finally, even if the constitution is changed, and if the referendum to leave the Euro passes,

  • it could still be blocked by the Constitutional Court.

  • So while the failure of December’s referendum has led to the PM’s resignation, few are

  • worried about losing the Euro.

  • In the meantime, the country will probably have a caretaker government, likely run by

  • the finance minister, until the next election in 2018, or until possible snap elections.

  • The changes in government also pave the way for the Five-Star Movement, and it has plenty

  • of other anti-establishment plans.

  • While now talks concern leaving the Euro, should the country continue on its current

  • path, some believe Italy may eventually try to withdraw from the EU entirely.

  • In any case, there’s no doubt Italy will be seeing major shifts in the coming years.

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  • If Italy does successfully leave the Euro, it would likely have volatile consequences

  • for the currency in financial markets.

  • The less stable a currency is, the less likely people are to use it.

  • So why did the EU decide on a multinational currency, and just how powerful has it been?

  • Find out in this video.

  • Countries whose currencies were already stable were given the opportunity to replace them

  • with the unified currency, which they called the Euro.

  • This transition occurred on January 1st of 1999.

  • However, in the year since, nine non-Eurozone countries have maintained their pre-European

  • Union currencies.

  • For many, this is due to the loss of control over interest rates or currency policies.

  • Thanks for watching Seeker Daily.

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In December 2016, Italian voters rejected a referendum on stripping one of the country’s

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Could Italy Drop The Euro And The EU?

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    BH posted on 2016/12/18
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