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Simplistic slogans of no benefit to EU

By Fraser Cameron | China Daily | Updated: 2016-12-08 07:40

Simplistic slogans of no benefit to EU

European Union (EU) flags fly in front of the European Central Bank (ECB) headquarters in Frankfurt, Germany, December 3, 2015. [Photo/Agencies]

Another referendum and another shock for the European Union. By linking his political future to a successful outcome of a plebiscite to amend the constitution, Matteo Renzi was playing for high stakes. Perhaps if he had waited to see the results of the Brexit referendum and the surprising Donald Trump election victory he might have taken a different course. Now Italy and the EU have to deal with the impact of his reckless gamble.

On the plus side, fears of a sharp drop in the euro proved groundless. There was a slight fall after the results then the euro recovered. And Italians are used to short-lived governments. President Sergio Mattarrela has asked Renzi to stay on until the budget is passed. Then he will either appoint a caretaker prime minister or call new elections.

The opposition parties including the Northern League and Five Star Movement are pushing for new elections and calling for a further referendum on whether Italy should remain in the eurozone. Most Italians dislike the government's austerity program which they see as being imposed on Italy by German Chancellor Angela Merkel. They are also angered at the lack of solidarity from other EU members in dealing with the massive inflow of refugees in the past 18 months.

Italians have always been among the most pro-European citizens of the EU but now attitudes are changing. Italy is a founding member of the EU and in a different category from the UK which has always been Eurosceptic. But no one can predict how Italians would vote if there were to be a referendum on keeping the euro. This is what worries other eurozone member states along with the huge debts of Italian banks.

Elsewhere in Europe the populist forces will have been heartened by Renzi's defeat. Marine Le Pen, the leader of the French National Front, said that the result was a blow to the "absurd austerity policy of the EU". She is likely to make it to the second round of the French presidential elections in May but is unlikely to defeat Francois Fillon, the center-right candidate who has been moving steadily to the right and stealing some of her policies.

In Germany the populist Alternative for Germany will certainly make it into the Bundestag following the September elections but both major parties, the Christian Democratic Union and the Social Democratic Party, have excluded the possibility of having them as a coalition partner.

Renzi's defeat means that there are now only a handful of socialist leaders in government in Europe. Although millions of workers are calling for social protection against globalization, the traditional socialist parties are struggling to deliver winning policies. Indeed many working class voters are moving to populist right-wing parties such as UK Independence Party in Britain and the National Front in France.

But these parties offer simplistic slogans for dealing with globalization just like Trump's campaign promise to "bring back 25 million jobs" to the US. If Trump does take the US down the protectionist road this will have major implications for the rest of the world, including the EU and China.

Most likely Italy will remain in the eurozone and muddle through as usual. With so many elections in 2017 there is no prospect of any major new initiatives by the EU. The 28 will gather for muted celebrations in Rome at the end of March. There could hardly be a worse time to call such a celebratory gathering as British Prime Minister Theresa May plans to trigger article 50 that same week thus setting Brexit in motion.

The EU will remain in a weak situation until 2018 or 2019 when the UK is due to leave. The question then is whether EU leaders can muster the political will to move the European project forward.

The author is director of the EU-Asia Centre in Brussels.

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