Day of populism in the EU: victory in Austria and catastrophe in Italy

The day of tempting populism in Europe – Sunday, Dec 4, 2016 – ended in a half result. On the one hand, on Dec 5 night, presidential hopeful from the rightwing Freedom Party of Austria Norbert Hofer admitted his loss to independent rival Alexander van der Bellen, but, on the other hand, in Austria, the president has no large powers and it was not a big loss for the Austrian rightwing forces – especially as no single rightwing politician has so far won presidency in post-war Austria. Hofer was very close to that goal. German Vice Chancellor Sigmar Gabriel qualified that news from Austria – Germany’s closest subsidiary – a victory of sense over populism and a big relief for Germany.

But this relief cannot be complete as on the same night, on Dec 5, Prime Minister of Italy Matteo Renzi admitted his loss in a constitutional referendum. The Italians have rejected his reform. Had they approved it, Italy would have become more controllable, which is crucial for overcoming the crisis in the country. Renzi has proved unable to overcome his people’s frustration and his colleagues’ egoism and is going to resign.

The key opponent of his reform was M5S leader and Euro-skeptic Beppe Grillo. If Renzi resigns, Italy will face a governmental crisis and may need mid-term parliamentary elections. If such elections are held, the winner may be Grillo and his M5S. Grillo’s potential partner is the rightwing Northern League Party. Grillo has promised that once he becomes prime minister, he will organize a referendum on Italy’s exit from Eurozone. But today most of the Italians want Euro to further be their currency and are against the comeback of Lira. In order to change their mind, Grillo may need a big street campaign.

Renzi’s resignation will be bad for Italy’s finances. It may cause financial instability and outflow of capital from the country.

So, while for Austria, Europe’s victory over Hofer is symbolical, for Italy, Renzi’s loss may mean big problems. It was a bad signal for Eurozone and for Italy, it means even poorer anti-crisis management.

EADaily’s European Bureau