Two months are now passed since June 23rd. The Brexit vote has shaken the EU but as far as today, as per my previous article forecast “To Brexit or not to Brexit that is the question”, no major disasters seem to have happened.
After few weeks of roller coasting the pound has strongly recovery both vs USD and EUR to a more realistic 1.31 and 1.17 exchange rate respectively. All UK economic indexes seem to be positive or at least not so bad and few sectors, like real estate, are suffering but due to other problems. Same happens for European countries.
The real issue that may affect EU though is the referendum that soon (late 2016 or first months of 2017) will be held in Italy to confirm constitutional amendments. Nobody is talking about such deadline of course but this event can, in my opinion, kick-off a chain reaction that my change Europe as we know it.
A victory of No side would more likely bring to as consequence an immediate fall of Renzi’s government; it has bond its fate to reform path approval and despite recent change of strategy a defeat of Yes party will bring to Renzi’s political end.
Recent polls (Scenari politici – Winpoll 13 – Italian) give a No side lead at 53% thus by the end of the year Italian government may fall and bring to an election in early 2017. At this point a win of the old parties would be nearly impossible, all the polls in fact see the anti-euro Movimento 5 Stelle on the lead at ballots both with Centrosinistra and Centrodestra (Termometro politico – Italian).
Such a situation may lead to an Italian referendum to leave the EU (baked also by Salvini’s Lega Nord), and an Italexit would bring a landslide in the continent. Differently from UK in fact Italy has a stronger bond with EU.
It’s one of the founder countries and politically would be a deadly failure for the union, it is furthermore in the Euro-BCE system and thus will affect dramatically the economy and probably the survival of such a currency. Last but not least Italy has a very weak economy and bank system and an exit would bring to an implosion of the country and whole North Mediterranean area (Greece, Portugal).
An Italexit in brief would mean the end of the EU as we know it.