If Italians buck the establishment—and it looks like they will—it will clear a path for a populist party to take power and for Italy to exit the euro.
As we have previewed on various occasions (most recently in Friday's extensive "Everything You Need To Know About The Italian Referendum & Should Be Afraid To Ask"), in a few short hours, Italy will vote on a constitutional reform referendum. While we urge readers to skim the in depth "walk thru", here is a simplified version of what happens after the likely "No" vote tomorrow.
The main concern in the markets - which has manifested itself in both the European currency, its vol structure, as well as Italian bond yields - is that a strong “No” vote will cause Prime Minister Renzi to resign, leading to political instability in Italy. Furthermore, a "No" vote is expected to kill a long-running attempt to rescue Italy's third largest and oldest bank, Monte dei Paschi, which has been desperate for a private sector bailout ever since it failed this summer's ECB stress test to avoid broader banking sector contagion; a failure of Monte Paschi will likely spark a fresh eurozone banking crisis, and prompt the ECB to get involved again (as it warned it would do), in a redux of what happened after the Brexit vote.
The biggest question from
tomorrow's today's vote, is what happens to Italian PM Renzi should he lose the vote, and as France 24 reports, if voters reject Renzi's plan to streamline parliament, the centre-left leader has said he will step down.
An Italian "No" vote simply accelerate the global backlash against globalization, and lead to even more trade protectionist measures. But what is the most likely outcome, is that when the "No" vote wins (despite the endorsement of The Economist, which has gotten the outcome of every major political event this year wrong), it will only push the case for the anti-establishment vote in more European countries, until eventually Europe's populist forces stretch the European experiment so thin, that the Eurozone itself - an experiment which from day one catered to corporate interests and an established political oligarchy - will collapse under the weight of its own discontents.
Also on Sunday, there is also a presidential election in Austria. A victory by the right-wing candidate, Norbert Hofer, would raise concerns about EU fragmentation because his party has advocated a referendum on EU membership. His victory would also raise concerns about a similar outcome in the French elections in May, and many other upcoming European elections as shown in the calendar at the bottom of this page:
Former British Prime Minister Tony Blair is to invest in a new “not for profit institute” dedicated to dreaming up pro-establishment, globalist policies.
He said the new institute would “build a new policy agenda” for what he called the “centre ground” of politics, as well as allowing “a reasonable and evidence based discussion of the future which avoids the plague of social media-led exchanges of abuse.”
Populism, Mr Blair said, was growing on both the left and the right, threatening the “open-minded” process of globalisation and the “benefits”
Recount Collapses: Jill Stein's Failure in Pennsylvania Means No Overturning Donald Trump's Ascension to Presidency
Late on Saturday, the Green Party withdrew its demand that the State of Pennsylvania perform a statewide recount, validating the state’s previous announcement giving Trump the win. It also leaves recounts in several other states without a hope of changing the outcome of the November 8 election of Donald J. Trump to the Presidency of the United States.
The final refuge of the exceptionally arrogant is to dismiss those who have rejected them, and expect them to come crawling back, asking for another chance.