According to “La Stampa”, one of the leading Italian newspapers, Matteo Renzi would have revealed to his closest collaborators his intentions to leave politics, should a no prevail in constitutional referendum on next 4 December.
Italian Prime Minister was yesterday in Turin to visit some key Italian corporations and meet entrepreneurs. Talking about the referendum, he admitted:” This is not an easy match and, if No-Party wins, we are going to throw away the really last chance to change the future of this country”, clarifying though that he is not afraid of the democratic people’s response.
After all, the game is not over. The No-Party, after an impressive recovery over the last few months, is still ahead by just 2% and undecided are still incredibly high, more than 44% of the voters. Clearly, an open match.
On the positive side, Renzi is getting support not only from the corporate world, in search for continuity at government level, but also from European institutions. In a Bloomberg interview on Thursday, European Union Economic and Monetary Commissioner Pierre Moscovici said he is “quite confident that Italy, as always, will solve its own problems with our help. He also referred to a “populist threat” inside the country, clearly referring to the Five Star Movement, the main Italian opposition party. However, he is facing a strong internal opposition, as well known political leaders within the Democratic Party supporting the no campaign, and the international press, Guardian, FT’s and Wall Street Journal, is arguing whether he is going to be the next Cameron.
What is interesting in this political battle is the general perception at the whole level. Despite Renzi’s potential shocking statement (” If no wins, I am going to change my job”), the vast majority of the today’s newspapers front page is on the news that over 100,000 Italians emigrated in 2015, up 6.2% over the previous year, according to a report by the Migrantes Foundation. Italy is still focused on other priorities: economic growth, high unemployment and, last but not least, an unstoppable growing number of people, young as well as middle age, leaving the country for a better future elsewhere.
From a market perspective, the Italian stock market is trading sideways and Italian BTP’s yields are trading near a 3-month’s high (1.37%). This movement is certainly part of a general spread widening observed over the most recent weeks, but overall Italian’s spreads are clearly underperforming in comparison with Spain and even Portugal. So far, markets seem to price uncertainty, but as the vote date is getting closer, higher volatility is widely expected.
