Barack Obama said this week that he would like to see Matteo Renzi “hang around” as Italian prime minister even if he loses a pivotal constitutional reform referendum in December. Such a scenario would represent a reversal of Mr Renzi’s vow to leave office if he is defeated, but may be reassuring for markets and investors looking for political stability in the eurozone’s third-largest economy. But it might not be that simple. So what are Mr Renzi’s options?
If the constitutional reforms are rejected by a wide margin, Mr Renzi may well have to stick to his pledge to leave power. His political capital would be so diminished that even Sergio Mattarella, the Italian president, would accept his resignation and move to form a government on the grounds that a change of leadership was required. Mr Renzi may even abandon the helm of the centre-left Democratic party. “I’ll go home and do something else with my life”, he said in a Vogue magazine profile published last month. However, this may not be end of the story for the former mayor of Florence, who, at 41, could still make a political comeback after a spell in exile.
If the result is close but the reforms are turned down, Mr Renzi may be asked by Mr Mattarella to form a new government. As well as Mr Obama, some Democratic party allies of his are pushing for such a solution, as Bloomberg reported this week. Mr Renzi may be tempted. He often speaks longingly of organising the G7 summit in Sicily, and the 60th anniversary celebrations of the EU’s founding Treaty of Rome next year. But sticking around could carry some serious drawbacks. For one, he would expose himself to severe mockery from the opposition who would accuse him of ignoring the will of the people. And his likely mission would be limited to changing the country’s controversial electoral law and passing the budget ahead of national polls in 2018, thankless tasks for an ambitious reformist like Mr Renzi.
Embrace the fudge
The base case scenario for many Italy-watchers is that a defeat for Mr Renzi would leave Mr Mattarella no other choice but to appoint a caretaker government to keep the lights on and prepare the country for the next elections. Mr Renzi would resign as prime minister, but would continue to run the Democratic party, much like he did before he rose to power in February 2014. The most likely candidates to take his place at Palazzo Chigi are Dario Franceschini, the culture minister and a key PD power-broker, Pietro Grasso, the president of the Senate, or possibly Pier Carlo Padoan, the finance minister, or Carlo Calenda, the industry minister. If Italy’s banking crisis flares up again, which it could given that Monte dei Paschi di Siena, the country’s struggling third-largest lender, is planning to launch its €5bn recapitalisation plan in December, the hot potato would be theirs to handle.
Go for broke
Mr Renzi is prone to taking big risks. He did so when he ousted Enrico Letta, his predecessor, from office in 2014, and when he staked his political future on the constitutional referendum. He could do so again if he is defeated in the referendum, persuading Mr Mattarella to dissolve parliament and move to snap elections. Such an outcome may sound crazier than it is. Mr Mattarella might be convinced that a fourth unelected prime minister in a row would further damage Italians’ confidence in democracy, at a time when it is already weak. Though wounded by the referendum loss, Mr Renzi may feel that his only redemption would be a national political mandate, which he has always lacked. Since the centre-right is split between the Northern League and Forza Italia, the party of former premier Silvio Berlusconi, the elections would probably turn into a direct contest between Mr Renzi and the Five Star Movement, an unpredictable anti-establishment force which many Italians would be reluctant to support for national office. The main objection to that scenario has always been that the electoral systems in the lower and upper chambers of parliament are very different and would need changing before a new poll to prevent gridlock: the one for the Senate has a proportional system and the one for the Chamber of Deputies offers a majority-premium to the winning party. But Mr Renzi and Mr Mattarella could argue that this is the configuration Italians have just voted to preserve and only the victor of new elections should lead the effort to reconcile them.