Italy’s Referendum Could destroy The EU
Could Italy’s referendum destroy the EU and cause gold and silver prices to rise?
Today is Sunday 20th November 2016 and we are covering the implications of Italy’s forthcoming Constitutional Referendum and ask the question could its result in the destruction of the EU?
Firstly we need to provide some background:
A constitutional referendum is planned to be held in Italy on Sunday 4 December 2016. Voters are to be asked whether they approve of amending the Italian Constitution to reform the appointment and powers of its Parliament, as well as the partition of powers of State, Regions, and administrative entities.
The constitutional bill, proposed by Prime Minister Matteo Renzi and his centre-left Democratic Party in 2014, was approved by an absolute majority of the MPs in both houses of the Italian Parliament. This will be the third constitutional referendum in the history of the Italian Republic: the other two were in 2001 and 2006.
Should the electors approve the bill, it would achieve the most extensive constitutional reform in Italy since the end of the monarchy, not only influencing the organization of the Parliament, but also improving, according to its proponents, on the poor government stability of the country. Opposition parties have harshly criticised the bill, claiming that it is badly written and that it will make the government too powerful.
The new Senate would have just 100 seats – comprising 74 regional councillors, 21 mayors, and five presidential nominees, with the latter serving for seven years rather than for life.
Mr Renzi’s reform will tip the balance of power towards the Chamber of Deputies – Italy’s equivalent of the House of Commons.
However, the aftermath of the Trump victory teaches us not to be too alarmist. If the Euro falls in value, then where is the hot money likely to go? Yes the US dollar which will strengthen even further and potentially weaken gold and silver prices, at least initially. So for those of our listeners who are still stacking, the 5th December could prove to be a very favourable buying day for precious metals. Of course the other issue could be that European stock markets would open significantly down, with Wall Street following suit and monies moving into the precious metals causing their prices to rise.
So as the old saying goes “You pays your money and takes your choice” – but either way there will, in our opinion, be an immediate reaction.
Finally, as to the question; will a no vote lead to the destruction of the EU? We believe no, but it is yet another chink in its armour, another loose brick in a slowly crumbling wall. It won’t be devastating but the EU could well do without such a result.
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Posted by Nicole Bourbaki