Italy: A post-Renzi election complicated by a new Italian election law | Financial Times

After prime minister Matteo Renzi’s crushing defeat in last weekend’s constitutional referendum, Italy has been thrown into political crisis. President Sergio Mattarella may appoint a caretaker government in the next few days. But a general election seems inevitable, as the only way to resolve the impasse in the longer term. The populist, anti-euro Five Star Movement led by the comedian Beppe Grillo is running neck and neck in the opinion polls with Mr Renzi’s Democratic party. Under an electoral law known as Italicum that came into force in July and under which the next general election is set to be held, Five Star could form a majority single-party government if it wins a certain share of votes. That prospect frightens Italy’s political establishment. Five Star aims to bring Italy out of the euro. Whatever one’s views on the single currency, such a development would be destabilising for Italy and the eurozone. Italy has chronically weak banks and an underperforming economy and a period of upheaval as it changed currency would make matters worse.

Full Article: A post-Renzi election complicated by a new Italian election law.

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