Is Italy about to feel the Trump effect with Prime Minister Matteo Renzi’s referendum?

The election of Donald Trump to the American presidency is causing turmoil in Italian politics in the run up to a constitutional referendum to be held on 4 December.

The referendum sets the stage for Italy to host the third major anti-establishment protest shock of 2016, before we’ve even had the chance fully to digest the news of Trump and Brexit.

The referendum is on a wide-ranging constitutional reform designed by Prime Minister Matteo Renzi and his government. It took more than two years to navigate through parliament and was put to the public vote once it had failed to win a two-thirds majority in parliament.

Renzi claims the reform will make Italian governments more stable and efficient. But the worry is that Trump’s election increases the likelihood that the reform will be rejected by voters.

That’s not because of the merits or flaws of the reform itself but because of the politics surrounding it. Renzi has effectively staked his all on the outcome of this referendum. In December 2015, with his personal poll ratings riding high, he announced, in De Gaullean style, that if he were to be defeated in the referendum he would resign.

This manoeuvre, which he assumed would convince any waverers to support the reform, turned out to be a catastrophic tactical misjudgement. It effectively turned the referendum into a plebiscite on Renzi.

That provided a theme for the anti-establishment Five Star Movement, which has campaigned vehemently for a No vote purely to remove Renzi from office.

The Five Star Movement has crowed Donald Trump’s election as evidence of a protest movement sweeping the West. It is calling on Italians to seize the opportunity of the referendum to join in. And indeed, support for the reform has consistently declined throughout the year. Polls now show a small majority in favour of voting No – although the large number of undecided voters leaves the outcome in the balance.

Renzi, since the summer, has attempted to change tack and depersonalise the referendum, separating its outcome from his own future. But the genie can’t be put back in the bottle. Polls indicate that over half of Italians intending to vote view the referendum as a judgement on the Renzi government and not the reform.

Renzi will surely be thinking of former British Prime Minister David Cameron, who famously argued that he would not resign if he lost the Brexit referendum, when most observers knew that it would be inevitable. A No vote in the referendum would signal not just the rejection of the reform but the end of the Renzi experiment.

If this is to be Renzi’s fate, the result will be instability, if not chaos. That’s not because the country will immediately go to an election, but rather because it will be unrealistic to do so.

To try and reinforce support for the constitutional reform, Renzi has also carried through an electoral reform of the lower house (the Chamber of Deputies), which came into effect in July. This new electoral law (the Italicum) was expressly designed to reinforce the constitutional reform, which reshapes the Senate, curtailing its powers compared to the Chamber of Deputies – the only house to be directly elected under the new scheme – by ensuring that a stable governing majority would always emerge from the ballot box.

However, if the constitutional reform is rejected, Italy would be left with two completely different electoral systems for the two parliamentary houses. It would provide the basis for two separate majorities in a system where both houses currently have identical powers.

The potential paralysis that this would create makes it inevitable that further electoral reform would immediately have to follow a rejection of the constitutional reform. And if Renzi resigned, it would mean bringing in yet another transitional government to implement such a reform.

This would probably be a “technical” or “institutional” government along the lines of those led by Renzi’s two immediate predecessors, Mario Monti and Enrico Letta. These administrations were installed under the auspices of the non-partisan Italian president with a specific programme of reform to implement, based on the (fragile) support of different political forces in parliament. Yet, the divisions between the parties over the sort of electoral reform needed would cause months of negotiation, instability, lack of direction and possible stalemate.

The elections that would surely follow electoral reform could result in the Five Star Movement emerging as the largest party. Successive opinion polls reveal a situation of tripolarity, with Renzi’s Democratic Party, the Five Star Movement and the centre-right parties (Silvio Berlusconi’s Forza Italia, the Northern League and Brothers of Italy) commanding about 30 per cent of the vote each.

All this will have reverberations beyond Italy because of the way Renzi has been able to convince international elites (most notably the European Union and President Obama) that the constitutional reform will increase Italy’s capacity to deliver on the EU’s economic agenda. Indeed, some of Renzi’s supporters in Italy are arguing that expectations abroad about the reform are now so high that its rejection would send a shock wave through international circles, damaging Italy’s credibility abroad and leaving it at the mercy of the markets.

For Renzi, there is bitter irony in the way this referendum has turned into an impending watershed for Italian politics. He stands to lose both the reform and possibly his political career on a wave of anti-establishment protest when his own emergence as leader of the Democratic Party and then as Prime Minister was precisely on the basis of an anti-establishment programme. He swept to power promising to scrap the old political class (rottamazione) and lay the foundations for a “new politics” in Italy. That was barely two years ago, but Renzi has learnt to his cost that an anti-establishment profile does not last long once in office.

This piece first appeared in The Conversation.