The writing is on the wall, the third domino is about to topple over, and the future of the European Union is unknown. Italy is at the heart of it, and global (or at least continental) government is fracturing before our eyes.
It seems that once again government has proven to the world that it can’t manage money. Local governments waste funds on foolish community enrichment projects, state governments waste it on failing schools that resemble black holes for dollars. National governments spend billions on endless wars and entitlement programs designed only to win votes in the short term. International governmental bodies are no different, and no more efficient.
On December 4th Italians will vote on a referendum put forth by current Prime Minister, Matteo Renzi. The vote will decide whether Italy moves to “stream line” its legislative process, eliminating vast numbers of representatives, hoping to move beyond the gridlock and stagnation seen for decades.
More rests on this vote than Italy’s own government though. Renzi has promised that should the Italian people vote ‘no’, he will resign, leaving the Prime Minister position vacant, and allow Italy’s most prominent opposition party, the Five Star Movement, a chance to take control.
The Five Star Movement has been wanting an important vote of its own, and Renzi leaving office could give them the perfect opening – a chance to vote on leaving the Euro, the international currency in use throughout much of Europe, in the dust. The thought of Italy decoupling from the Euro has thrown Europe’s economy into a frenzy. It would be the second country this year to regain monetary independence, and along with Brexit and the Trump election, would be the third strike against globalism.
After Greece, Italy is the second most debt stricken country in the European Union, with national debt at 133% of GDP. Its banks are over-leveraged, burdened with bad loans that will likely never be paid back, and while Renzi may wish to make massive structural changes to the country’s financial policies, his wishes may be in vain.
Too much debt, an entitled population, an unwillingness to cut spending, and a stagnant economy as a result, has pushed voters to rebel against the establishment, and drawn more and more people to the Five Star Movement. The vote on December 4th will be yet another historic moment when governments run out of road to kick the can down.