Italy: Political implications of “No” vote - Westpac

Research Team at Westpac, explains that if we do see a “No” vote in the upcoming Italian referendum then Renzi has stated he will resign and is not willing to take part in any potential technocratic government.

Key Quotes

“His opponents, both in other parties and within his own, have leapt on this as a potential means to oust him and he has since tried to backtrack on this statement, whilst appearing to stay good to his word. Again, as we have seen in recent political events, we are far from certain this will play out as expected, and while the assumption of Renzi resignation and then elections is possible, there are several other potential outcomes (with our estimated probabilities below):

• The President could reject Renzi’s resignation and ask him to go back and form another coalition. (15%)
• The President could accept and ask someone else to form a Government. (30%)
• Renzi does not resign, carries on and then faces possible no confidence votes and the previous two options occur. (10%)
• Renzi does not resign but has to form a grand coalition with other parties to avoid no confidence votes. (5%)
• 40% chance of YES.”