Analysis: Why Matteo Renzi lost the referendum

Italian prime minister Matteo Renzi resigned his office on Sunday night in the immediate aftermath of a defeat of tsunami proportions in the constitutional reform referendum. The Italian electorate, which registered a high turnout of 68.5 per cent, voted 40-60 per cent against Renzi's proposals.

Speaking just 90 minutes after polling stations closed, Renzi said he had given the referendum campaign his best shot but, given the clear verdict of the electorate, he would be offering his resignation to state president Sergio Mattarella on Monday, adding:

“Today the Italian people have spoken and they have spoken in an unequivocal manner . . . I believe that this has been a great celebration for democracy, with a turnout that proved higher than all expectations . . .

“We weren’t able to convince the majority of our fellow citizens . . . We wanted to win this vote, not just to take part and therefore I assume the entire responsibility for this defeat. As was clear from day one, my government ends here. Tomorrow afternoon, I will summon the cabinet, thank my colleagues and then formally hand in my resignation to the president of the republic.”

Inevitably, the immediate political scenario is far from clear. On Sunday night, the three major parties which had campaigned for a No vote, namely the anti-immigrant Northern League, the Five Star Movement (M5S) and the Forza Italia party of media tycoon Silvio Berlusconi, all called for an immediate general election.

That call, however, will be made by state president Sergio Mattarella who will be anxious to limit the potential damage of a protracted government crisis which could yet generate market turbulence, causing problems for Italy’s stagnant economy and, in particular, for its shaky banking system. World finance, the markets, and world leaders such as US president Barack Obama and German chancellor Angela Merkel had all called for a Yes vote in favour of Renzi, precisely to limit such damage.

Those leaders and the markets, however, completely underestimated the extent to which energetic, 41-year-old Renzi had lost the faith of a majority of Italians who, after nearly three years of his government, were simply suspicious of his intentions. Having burst into government house, unelected and not even a member of parliament, Renzi in February 2014 had seemed like not just a breath of fresh, youthful air but also someone from outside the political caste system.

In reality, however, Renzi has always been an intensely ambitious politician in a huge hurry and one who soon became identified with the “fat cats”. His biggest mistake in the referendum campaign was to have initially personalised the issue, saying that he would resign if it did not pass.

That meant, obviously, that to a certain extent this was a vote pro or contra him. Yet, given the relatively stagnant nature of an Italian economy in which unemployment is currently 11.6 per cent, youth unemployment 36.4 per cent and the growth rate a modest 0.8 per cent, there were plenty of unhappy people out there. In that context, those who saw this vote as a potential protest hat-trick in the wake of the UK’s Brexit vote and the US presidential election win of Donald Trump were proved correct.

For once also, Renzi’s political nous may have deserted him. Even though, he campaigned hard for this referendum, perhaps too hard, his strategy may have been wrong. His omnipresence on Italian TV, especially during the last three months of an intense campaign, may well have backfired. Critically, his failure to convince his own Democratic Party, many of whom voted against his changes, perhaps sounded this referendum’s death knell.

On top of that, Renzi’s government style began to irritate. His liberal use of Twitter, his insistence on dominating practically all government press conferences, his use of government helicopters, his ordering of a new government jet and even his wearing of more than one Rolex watch may in the end have alienated people.

As for the immediate future, Mattarella, the president, faces a difficult situation. This morning, he must choose between a motely crew of referendum winners who have difficulty agreeing the time of day and a defeated coalition who still control parliament. Finding himself a prime minister in that situation will not be easy and may leave him with little option but to call an early general election.