Why Italians are so angry ahead of Europe's most important vote since Brexit

'What happened with these four banks was an injustice'

Angela Giuffrida
Sunday 04 December 2016 14:51 GMT
Matteo Renzi has said he will quit if he loses, which would spark renewed political turmoil
Matteo Renzi has said he will quit if he loses, which would spark renewed political turmoil

To get a sense of the mood among Italians as they vote in a crucial referendum, on a constitutional overhaul on which Prime Minister Matteo Renzi has staked his leadership, you need only to speak to those whose life savings were wiped out in a government-brokered rescue of four banks.

It's been almost a year since Letizia Giorgianni, a bondholder in one of the banks, Banca Etruria, woke up to the news that she had lost €100,000 in savings. She now respresents thousands of other small investors still fighting to get their money back from the salvaged banks, which include Cassa di Risparmio di Ferrara, Banca della Marche and CariChieti. At the time, Renzi insisted the €4 billion rescue had to be done "to save jobs".

"What happened with these four banks was an injustice to people who had nothing and who have been left in dire straits," said Giorgianni, adding that between them they lost €400 million. "This deal was disgraceful – and now this government wants to modify the constitution in order to strengthen its own power?"

Giorgianni, from the Tuscan town of Arezzo where Banca Etruria is based, has cast her vote and is confident Italians will snub Renzi's proposals, which are intended to streamline a costly and bloated government. "It's not that this constitution doesn't need change, but this government has worked badly for us. If we win, then it will send out a strong message."

Having lost her savings, Giorgianni is unperturbed by the forescasts of doom should Renzi step down, and further calamity among Italy's banks prevail. The biggest concern, at least in the short-term, is whether the ensuing political uncertainty will jeopardise a €5 billion bailout of the world's oldest bank, Banca Monte dei Paschi di Siena (MPS), which was rated as Europe's most vulnerable in stress tests in July.

"Whatever the outcome of the vote, it will be bad news for MPS," she added. "They haven't been able to find any investors to help save it so far, and nothing will change if Renzi wins."

It's a big moment for Matteo Renzi

Voters are being asked whether they want to curtail the powers of Italy's upper house of parliament, a move that would slash the number of senators from 315 to 100 and save an estimated €500 million a year.

The main aim is to get laws passed quicker and bring stability to a country which has had 63 governments in 70 years.

But populists, emboldened by Brexit and the election of Donald Trump in the US, have have also exploited public discontent over a perennially sluggish economy, and Renzi's vow to quit. The Five Star Movement, the second biggest party in parliament, founded by comedian Beppe Grillo, has repeatedly pledged to call a referendum on Italy's membership of the euro if it wins the next general election.

His supporters are also feeling upbeat that change is afoot. "I don't believe in the word 'populist', said 67-year-old Stefano Gaetani, who also rejecting Renzi's reforms. "But this party is more in touch with the people, why not give them the chance?"

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