Italians will vote for or against a package of constitutional reforms which will reduce the power of the Senate and give more authority to the central government.
Prime Minister Renzi’s legislative reform proposals include down-sizing of the Senate house from 315 to 100 members.
The Senate will be responsible for revising the constitution and laws covering 20 regions. The Chamber of Deputies or lower house will be in charge of organizing confidential votes and ratifying draft laws.
The reforms mean that regions cede some decision-making powers to the central government.
Prime Minister Renzi says the reforms are necessary to make Italy, which has had 63 governments since 1948, governable enough to enact further reforms needed to revive its economy.
Reasons for the referendum
The Prime Minister calls constitutional reform the mother of all battles which will decide a new path for Italy for many decades.
He insists constitutional reform is necessary to modernize Italy, make it more compatible with the EU, and prepare for the challenges of rapid globalization.
The upper and lower houses now have equal authority, which prevents law makers from making prompt decisions and obstructs economic and political reforms.
If voters support the proposed reforms, the upper house will have less power.
Together with a new election law, which says a ruling party with a majority of seats in the parliament doesn’t have to ally with other parties, will give the Prime Minister momentum to implement his economic reforms. Economists say Italy needs to reform its constitution to boost the economy.
Prime Minister Renzi’s risky, sensible move
Prime Minister Renzi is risking his political future on the referendum on December 4th. He has offered to resign if Italians vote no.
The Prime Minister’s Democratic Party has seen signs of division prior to the referendum. 40 public polls have shown strong opposition to the reforms.
On November 27 tens of thousands of people from opposition parties took to the streets to appeal for a “No” vote.
If Italians reject the constitutional reforms, Prime Minister Renzi will resign, which is predicted to negatively impact Italy’s economy. 8 banks will go bankrupt. The IMF says Italian banks’ bad debts total US$400 billion.
The EU is closely watching Italy’s referendum. If Prime Minister Renzi fails, the 5-star movement led by former comedian Beppe Grillo, which strongly opposes the reforms, will gain prestige. The 5-star movement supports Italy leaving the EU.