December 2, 2016
By William Medici
The Italians will vote on a crucial referendum on Sunday, December 4. If they vote no on these constitutional changes, which is likely, this could set-off a chain reaction that will end the European Union as we know it. As I wrote in September, ‘Italy’s Economy Falls by .5% over the last 15 Years – Why This Should Scare You’ Italy has had 15 straight years of economic stagnation, high unemployment and their banks are on the brink of collapse. Along with a political system that refuses to reform, the country could very well take down the rest of Europe with it.
When I was stationed in Italy, the running joke among my American friends was that Italy was good at food and fashion but lousy at governing itself. Of course, most people didn’t realize what exactly was our involvement in Italy throughout the years. For example, after WWII, we launched Operation Gladio that was meant to keep the communism party, the largest outside of Moscow, from gaining power in the Italian government. Today we still play a crucial role to keep Italy a strategic partner, with political and economical support as well as our clandestine efforts to keep the country safe from say, terrorists who are hell bent on starting a holy war.
Currently the 5 Star political movement has attracted both the left and the right, and has been the driving force to create change in Italy. They also have been critical of the European Union. The influx of refugees and migrants, over 200,000 entered Italy this year alone, has the left-wing populists and the right-wing populists in Italy blaming the EU for not helping with this migrant crisis which is just the tip of the iceberg. I will be continuing this column after the results of the referendum. Stay Tuned!
December 4, 2016
The Italians have rejected the referendum in favor of the status quo. Matteo Renzi resigned as prime minister and the Italian constitutional court is going to determine if early elections can take place prior to 2018. My sources inside the Italian government, both on the left and the right, had told me months ago that this would be the outcome. What happens now? Speculation about when the Italian banking collapse will happen is being discussed among the New York financial community.
The current unemployment rate for people under 30 is more than 50% in the South of Italy alone, and with very few prospects for opportunity, there is just no place to go. Italy is not the most productive country in the G7. Heavy regulation, complex taxes and the high cost to do business has replaced the tenant-farmer system that forced over 4 million to leave Italy between 1870 and 1920. Another 500,000 emigrated between 1945 and 1990 and nearly 20,000 more white collar professionals had emigrated to London and New York over the last 25 years. While tens of thousands of Africans have been immigrating to Italy each year. They are the people who are doing mostly menial, low-paying jobs that Italians no longer want. With one of the lowest birth rates in Europe, Italy is going to need those immigrants to keep the country afloat.
During the last 240 years, the United States has continued to amend the country’s constitution, from abolishing slavery, to giving women the right to vote to limiting the president to serving two terms, all of which has made the country stronger. Italians emphatically rejected the reforms proposed to their constitution and therefore opted for the status quo. As I wrote in September, internal reform is an alien concept to most Italians. If Italy does not reform and streamline how the country operates, then the status quo will be its undoing.
William Medici is an entrepreneur, adviser, writer & producer, media contributor and philanthropist.