"Watch out for false prophets. They come to you in sheep's clothing, but inwardly they are ferocious wolves.” (Matthew 7:15)

There is an infectious contagion of an almost religious zeal and a resurgence of a devout belief against anything that signifies tolerance and openness and is taking hold of people across Europe and America. This epidemic comes in the form of populism characterised by a hatred towards anything that welcomes open and liberal attitudes. Anti-immigration, protectionist, anti-globalisation, Eurosceptic and anti-establishment, populist parties and movements are on the rise, threatening social cohesion and democracy. Seeing themselves as pure, populists are in opposition to what they see as the “corrupt elites.”

This desire for isolationism from anything foreign—from the free movement of people to that of capital—is very familiar to us in the often-repeated slogans of their false prophets: “Make America great again,” “One is worth one” (Five Star Movement), or, one closer to home, “We want our country back.”

Populist movements in Europe

This wave of populism that is currently challenging Western democracies is easily recognisable. There is UK Independence Party’s (UKIP) rise and the Brexit vote, Trump’s upset win and the “alt-right”, and the French Marine Le Pen’s National Front party—also anti-immigration, anti-European and protectionist. Le Pen is now considered a possible winner for May’s presidential election against centre-right Republican candidate, François Fillon—who is also defending French national identity and fighting against multiculturalism. 

There is also the Austrian Norbert Hofer’s far-right, anti-immigrant Freedom party, founded by a former SS, which has now been temporarily halted after Hofer lost to former Green Party leader, Alexander Van der Bellen, in yesterday’s presidential election. If he won, Hofer would have become the first elected far-right president since World War Two. UKIP’s Nigel Farage had told Fox News on Friday that Hofer would hold a referendum on Austria leaving the EU. Hofer was angered with Farage’s intervention because he believes it contributed to his defeat, particularly, since Austria is, in its majority, pro-European.

Now, with the Italian PM Matteo Renzi’s defeat yesterday (4 December), after Italian voters voted “no” to his referendum asking for political changes to the constitution, there is the alarming prospect of another populist party taking control. The Italian Five Star Movement (M5S), which was against the reforms, wants to call for early elections, but the possibility of them winning is, at the moment, a small one. While Renzi’s reforms have been criticised by the Left and Right, not everyone that voted against the reforms would vote for a far-right party, such as the M5S or the Northern League, in a national election. 

With populists and Eurosceptics gaining popular appeal in France and Germany, Renzi’s defeat is seen as a massive crack in the European project.

The Italian Referendum

Italians were asked to vote “Yes” or “No” to a series of reforms which the parliament approved by a small margin, and which need to be passed by the referendum. The current political system consists of two chambers of parliament: The Chamber of Deputies and the Senate. They both have equal power and both must agree whether a legislation can be passed or not; a procedure that is lengthy. The referendum proposed that the Senate lose most of its power, something that will make passing laws much easier for the Chamber of Deputies, which won’t have to consult the Senate anymore.

The referendum was backed by Renzi and most of his Democratic party supporters, but was opposed by many on the left and right who wanted to force him out. The far-right Five Star Movement campaigned for “no” in the referendum and promised to call a referendum on Euro membership in case they won. The reason the Italian referendum is compared to Brexit is that both were won by populist parties. 

The referendum results don’t send a clear message

The referendum results can’t be considered as representative of this or that party since a “no” vote, for example, can be partly understood as a straightforward no to the referendum’s question on whether changes to the constitution are necessary. But, it can also be read as a vote of no confidence to Renzi. Many who voted “no” were concerned with the reforms because they weakened Italian democracy and gave too much power to the Prime Minister. With the far right growing its supporters, a “no” vote was also a no to the populists. If the constitution remains the same and the Senate retains its power, parties like M5S will find it difficult to get elected and call a referendum. Even if they were to govern, it would be hard for them to rule as one party, since coalitions would be more favourable.   

As many commentators noticed, the high-voter turnout was a message to the establishment for some form of change, and not necessarily a victory for the far right.

Italy is ridden with a series of big problems. From immigration to the banking crisis, debt and unemployment, the country feels abandoned by Europe. The biggest problem is mainly the fragile banking system, and the referendum will only exacerbate the economic stagnation. The “no” to the referendum was a response to all these issues.

European system in question

Talking to BBC Radio 4’s Today programme, the UK spokesman for the M5S, Daniele Caprera, stressed the problem with the single currency and how the Euro damaged the Italian economy. But, he also made some interesting comments on the current situation of the European Union: 

“There is already a crisis in the EU. The current European system doesn’t meet the European people’s needs. It is more of economic system. It doesn’t help socially any of the problems that there are in Europe with immigration, and financial problems. Europe right now is being used to bring in cheap labour, to lower everybody’s salary. It is not a very good system.” 

Putting the anti-immigration sentiment aside, Caprera touches upon the crucial issue with the EU: its fragmentary nature and unclear objective. On the one hand, the EU professes to be a union of nations, but, on the other hand, it wants to be a strong economic force. Its message isn’t clear. This isn’t to say that by controlling immigration or leaving the EU, a country’s economic problems will be solved. On the contrary, the only ethical way to move forward is to ignore the promises of all these false prophets, and accept refugees with all their differences. Unemployment and inequalities are the result of neoliberal policies and not of immigration. The wolves that come in sheep’s clothing promising us that our lives will become better by letting refugees drown in the Mediterranean Sea, should be seen for what they are. In the end of the day, the populist obsession with the threat of immigrants reveals that the problem lies with us, Europeans and Europe itself, our identity and how we see ourselves. 

Market reaction

European and global markets were counting on Renzi to win and didn’t want to see any more uncertainty in the country, especially when the Italian economy is slowly recovering. Some bankers had expressed their concerns that a “no” win could subvert plans to rescue Italy’s third largest, and the world’s oldest remaining bank, Banca Monte dei Paschi di Siena. 

Renzi’s defeat caused an immediate drop to the Euro, but the fall was only one cent against the dollar: $1.0573. Shares in Banca Monte dei Paschi di Siena, as well as in most Italian banks, fell sharply.

What happens next?

For now, it seems that after Renzi’s resignation—he will remain in office for at least a week—there will be the formation of a new government by President Sergio Mattarella and with the agreement of the country’s leading parties. The PM who will be chosen, perhaps from Renzi’s Democratic party, will serve until the end of the current parliamentary term, February 2018. But, the Euroscepticism of M5S and Northern League won’t be changing things radically: there won’t be any departure from the single market or the single currency, at least not yet. 

With Austria’s no to the far-right Hofer and Italy’s no to parliamentary despotism, I think Sunday proved to be a good day for democracy.