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"It Could Open A Pandora's Box": Italy's 2 Richest Regions Are Voting In Historic Autonomy Referendums

Published: October 22, 2017
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Source: Zero Hedge

Voters in Italy's two wealthiest northern regions of Lombardy and Veneto are voting on Sunday in referendums for greater autonomy from Rome, in which a positive outcome could fan regional tensions in Europe at a time when neighboring Spain is cracking down to prevent Catalonia from breaking away.

 

 

Lombardy, which includes Milan, and Veneto, which houses the tourist powerhouse Venice, are home to around a quarter of Italy's population and account for 30% of Italy's economy, the Eurozone's third largest. Unlike Catalonia, the consultative votes are only the beginning of a process which could over time lead to powers being devolved from Rome. Also unlike Catalonia, which held an independence referendum on Oct. 1 despite it being ruled unconstitutional, the Italian referendums are within the law. Like Catalonia, however, Lombardy and Veneto complain they pay far more in taxes than they receive.

At its core, today's vote is about whether taxes collected in the two wealthy regions should be used far more for the benefit of the two regions, or diluted among Italy's other, poorer regions, especially in the south. Lombardy sends €54 billion more in taxes to Rome than it gets back in public spending. Veneto's net contribution is 15.5 billion. The two regions would like to roughly halve those contributions - a concession the cash-strapped state, labouring under a mountain of debt, can ill afford.

The two regions are both run by the once openly secessionist Lega Nord, or Northern League party, which hopes that the result will give it a mandate to negotiate better financial deals from Rome. The Northern League was established in the 1990s to campaign for an independent state of “Padania”, stretching across Italy’s north, from around Lombardy in the west to Venice in the east. It no longer campaigns for secession but argues that taxes the north sends to Rome are wasted by inefficient national bureaucracy.

While the twin referendums are non-binding, a resounding "yes" vote would give the presidents of the neighboring regions more leverage in negotiations to seek a greater share of tax revenue and to grab responsibility from Rome. The leaders want more powers in areas such as security, immigration, education and the environment.

 

 

Enthusiasm for today's vote will be critical as the level of turnout will have a direct significance of the results: in Veneto, it has to pass 50% for the result to be considered valid. There is no threshold in Lombardy but low voter participation would weaken the region's hand in any subsequent negotiations with the central government.

* * *

Even though secessionist sentiment in the two wealthy regions is restricted to what has been dubbed "fringe groups" with little following, nonetheless with both regions expected to vote in favour of the principle of greater autonomy, analysts see the referendums as reflecting the pressures that resulted in Scotland's narrowly-defeated independence vote, Britain's decision to leave the EU and the Catalan crisis according to AFP.

With dynamic economies and lower unemployment and welfare costs than the Italian average, both regions are large net contributors to a central state widely regarded as inefficient at best.

Public opinions covered both extremes of the spectrum:  

“Lombardy and Veneto have two efficient administrations and public services work well, much better than in other Italian regions ... this is why I think it is worth asking for greater autonomy,” said Massimo Piscetta, 49, who voted “Yes” in a small town outside Milan.

"Our taxes should be spent here, not in Sicily," echoed says Giuseppe Colonna, an 84-year-old Venetian, speaking to AFP.

“I am not going to vote because I think this referendum is useless, expensive, ambiguous and unfair,” countered Giovanni Casolo, 54, speaking to Reuters and expressing concern that the text of the Lombardy referendum did not spell the areas where the region wanted to increase its autonomy.

Veneto president Luca Zaia says €30 billion euros are wasted every year at a national level and fiscal rebalancing will be a top priority for him and his Lombardy counterpart Roberto Maroni if the votes go their way.  The two regional presidents, both members of the far-right Northern League, plan to ask for more powers over infrastructure, the environment, health and education. They also want new ones relating to security issues and immigration -- steps which would require changes to the constitution.

Lombardy’s leader, Roberto Maroni, says a strong victory for “Yes” would give him a mandate to bargain hard in Rome. “It’s obvious that the more negotiating power I have, the more money I can manage to bring home,” Maroni told Reuters in the run-up to the referendum. Lombardy alone wants to keep an additional 27 billion euros ($32 billion) of its own taxes.  Maroni said he would be happy if 34 percent of the region's 7.5 million voters cast ballots, equal to the national turnout in a 2001 constitutional referendum. Veneto's aspirations will wither if voter turnout is below 50 percent plus one of the region's 3.5 million voters.

Still, political experts say neither region is likely to succeed in wresting much money away from the central government without causing problems for regions in Italy’s poor south.

 
 

Giovanni Orsina, history professor at Rome’s Luiss-Guido Carli University, said a strong “Yes” vote could deepen the old north-south divide which dates back to before Italian unification in the 19th century.

 

“Once you open up the issue of what the northern regions pay, then I expect a backlash in southern Italy,” he said.

European Parliament chief Antonio Tajani on Sunday took care to distinguish between Catalan's chaotic independence referendum, deemed illegal by Madrid, and the votes in Italy. "First of all these two referendums are legitimate, that was not the case in Catalonia," he told the Rome daily Il Messaggero. "In Spain, it is not about autonomy, but a proclamation of independence in defiance of the rule of law and against the Spanish constitution." He said Europe should "fear" the spread of small nations: "It is not by degrading nationhood that we reinforce Europe.

* * *

Italy's "North-South divide"

Enzo Moavero Milanesi, law professor and former cabinet minister, told Deutsche Welle that while a development and employment gap between the North and South remains, the resentment of the North toward the South is no longer what it was several decades ago. "The main point is the correct administration," says Milanesi of the move for autonomy. "These two regions have been ruled by the Northern League for years and they are well-managed. There's a good health system, low unemployment rate; so the idea is to draw attention to how managed they are and how much better the country could be managed."

Like Fusone, he says the economic crisis in Europe has largely fueled the drive for more regional autonomy in Italy and elsewhere. "It has led some to believe that more local autonomy might be a way to escape a political decision far away," he said. "But the real question is: What is local? Is a country local with respect to the EU? Is it a region? A town?"

The question is hardly rhetorical. Alongside the issue of more regional autonomy in the Veneto referendum, another question was supposed to address whether the city of Venice should separate from the nearby mainland city of Mestre. Venetians in favor of the move say it would allow Venice to tackle the issue of mammoth cruise ships and tourism causing environmental harm to their harbor. But Italy's constitutional court has yet rule on whether the question of municipal separation is legal. Consequently, Governor Zaia excluded it from the ballot, to the bitter disappointment of many.

But it's a question that could well re-emerge — and not the only one. "There are rumors about other regions, such as Emilia-Romagna, wanting autonomy," says Milanesi. "So the mosaic is quite colorful."

* * *

Despite much less angst about today's outcome, the referendums could have a domino effect as a similar autonomy vote is being debated in Liguria, the region that includes the Riviera coastline, and Emilia Romagna, another wealthy industrial part of the country, is already trying to negotiate more devolved powers.

Economist Lorenzo Codogno says that while Italian unity is not under threat, "Sunday could mark the opening of a Pandora's box."

 
 

"The issue is likely to spread, and eventually, it will require a generalised approach by the next government and a reform of the constitution."

And while the referendums have been driven by the Northern League, which has long abandoned the secessionist principles on which it was founded as observed above, the Yes campaign is backed by most of the centre right and sections of the centre left. Milan's mayor Giuseppe Sala, a member of the ruling Democratic Party, says greater self-rule "is an idea shared by everyone, not one that belongs to the League."

As AFP notes, the referendum questions are framed differently in the two regions but both ask voters to say Yes or No to "further forms and special conditions of autonomy".

In a first for Italy, voting in Lombardy will be conducted on computer tablets. Acquiring them raised the cost of the ballot but should ensure an early result after polls close at 11 pm.

 

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