The financial media and establishment really have no shame. No matter how many times they are proven wrong with their fear campaigns, dire warnings of financial crisis remain the go-to tactic of some of the most powerful institutions in the world against sovereign peoples declaring their independence from globalist utopianism via the ballot box.
This time it’s Italy, and Prime Minister Matteo Renzi’s proposed constitutional amendments. “Fears mount of multiple bank failures if Renzi loses referendum,” screams the headline from the Financial Times.
Renzi’s proposal would restructure Italy’s Senate from 315 seats to 100 seats, with its role in passing laws significantly reduced and its role in selecting the Prime Minister eliminated. The lower house of parliament, the Chamber of Deputies would become the principal lawmaking body, with the Senate’s role reduced merely to making changes to certain pieces of Chamber-passed legislation, which could then be overridden by the Chamber. The Senate would be even less than a rubber stamp. It would be a speed bump.
Under current law, after elections, the President of Italy appoints the Prime Minister, usually the leader of the party that just won the most seats in the election, who then has to be approved by both chambers of the parliament. Under the new proposal, the Prime Minister would only have to be approved by the Chamber of Deputies, which would be stacked with members of the winning party in the election.
Given the nature of Italy’s parliamentary system, no one party typically gets a majority of the vote in elections; and so per the country’s new election law, whichever party wins the most votes gets additional seats to constitute a majority in the lower chamber, but critically, not in the Senate. The new election law also provides for a run-off after an initial general election between the top two parties, and will have the effect of knocking smaller political parties out of the parliament. Still, the current structure dilutes the power of the Chamber of Deputies and guarantees that any Prime Minister, in order to be appointed, or any law for that matter, in order to pass, has to achieve broad support across party lines in both chambers. As a result, the current system requires coalitions in order to govern effectively via consensus.
Thus, Renzi’s proposal would be an effective end to the symmetric bicameral legislative system in Italy as the Senate was stripped of most of its constitutional powers. It would also mark the end of coalition governance in Italy, because the support of other parties would no longer be necessary to form a government or even to pass laws. Simply winning 29 percent of the vote in the election, and winning the subsequent run-off, would grant the winning party an absolute majority of the Chamber of Deputies, enough to form a government and pass whatever legislation it wants with little to no check from either the Senate or the other parties. At least now, the Senate and other parties still have a role in choosing the government and passing laws — and deposing a government when it lacks confidence.
What do these changes to the Constitution have to do with the solvency of banks? Almost nothing, as it turns out. The Financial Times’ Rachel Sanderson explains: “Up to eight of Italy’s troubled banks risk failing if prime minister Matteo Renzi loses a constitutional referendum next weekend and ensuing market turbulence deters investors from recapitalising them, officials and senior bankers say.”
If the referendum fails, Renzi might resign and that would send jitters through markets, with investors reluctant to recapitalize banks and risk losing their money under a new European Union rule that, per Sanderson, “restructures and, if necessary, winds up a bank by imposing losses on both equity and debt investors, particularly controversial in Italy, where millions of individual investors have bought bank bonds.”
Got that? The Italian people are now being pressured by global elites into abolishing majority rule because some banks, which might fail anyway, may not be able to abide by rules imposed by Brussels, which will still be in place even if Renzi’s referendum passes.
Italy’s banking system has been on very shaky ground ever since the financial and sovereign debt crises, but even if the referendum’s failure meant a new government would need to be formed and there might be temporary market uncertainty, that would still not be a reason to vote yes to abolish Italy’s current systems for forming a government and passing laws.
The Italian people could do their country — and the world for that matter — a huge favor by defeating this ill-advised proposal and dealing another setback to the globalist financial elite that thinks it can overthrow democracy by using fear and phony threats of financial crisis. Similar tactics were used with effect to strong-arm bank bailouts in the U.S. in 2008 and in Europe in during the sovereign debt crisis.
But no longer.
The edifice of Project Fear is finally collapsing. Similar fear-mongering campaigns in 2016 have failed, being rejected by voters in the United Kingdom, who were warned of financial crisis if Brexit passed, and in the United States, who were promised a market crash if Donald Trump won the presidency. Instead, Brexit did pass and Trump was elected — and nothing bad happened.
If, in Italy, banks get into trouble, it won’t be because the Renzi referendum failed. It will be because its financial system may be irreparable. Perhaps leaders there should look at Italy’s continued membership in the ill-conceived, undemocratic Eurozone and European Union — and its overvalued currency that leaves Italy more likely to default on its debts — not at abolishing democratic institutions. Repealing the Senate’s constitutional role in passing laws and in naming a government won’t change the common currency’s failures. Italy might need to default when all is said and done anyway.
Robert Romano is the senior editor of Americans for Limited Government.
Updated to include the run-off after the first round of voting in the general election.
