Elites' fear

After Trump and Brexit, All Eyes Are on Italy’s Constitutional Referendum

After Brexit and Donald Trump, will Italy be next? Prime MinisterMatteo Renzi’s Dec. 4 referendum on his proposed constitutional overhauls—designed to strengthen the power of the government by making it easier to pass laws—is the next opportunity for voters in a major economy to give the establishment another kicking.

Polls currently show the “No” vote narrowly ahead, albeit with up to a quarter of voters still to make up their minds. European policy makers have been privately warning for months that they see Italy as the biggest risk to the financial stability of the eurozone. The market is also starting to sniff trouble ahead: the spread between the yields on German and Italian government bonds has widened to more than 1.6 percentage points, the widest it has been since the European Central Bank started buying bonds in March 2015.