Italy is holding a referendum on December 4 on proposals to reduce the power of the Senate. Prime Minister Matteo Renzi, however, has made the vote about him, by threatening to resign if “no” wins. The anti-establishment Five Star Movement, which heads the “no” forces, has pledged to keep the 41-year-old prime minister to his word – and polls show the referendum heading for a narrow defeat. The danger for investors is that the eurozone's third-largest economy, which has sick public finances, a crisis-prone political system, weak institutions, a stalled and inefficient economy and a wobbly banking system, could face political upheaval within weeks. If Renzi departs David Cameron-style after a lost referendum, Italy could be beset by similar political turmoil to that unleashed in the UK when the Brexit vote succeeded. (VIEW LINK)
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