Mixed signals from Europe

The fear of a populist revolt against the Establishment favouring the elite and global capitalism may be stoked further by the “no” in the Italian referendum that rejected constitutional reforms, after which Prime Minister Matteo Renzi may resign. What may have allayed such fears is another event in Europe itself, as Austria decisively rejected a far-right head of state in the Freedom Party’s Norbert Hofer. The world, already in shock with Britain voting in a referendum to leave the EU and Donald Trump elected US President, may still hold a balance between the Left-Liberals and the far-right. The defeat of proto-fascists in Austria, a country that was the deliberate or unwitting cause of World War I and which also gave birth to Adolf Hitler, is a significant victory for those who believe the time is up for extreme and divisive political ideologies.

The Italian vote is seen more as a negative response to the incumbent PM’s record rather than the huge immigration problem the country faces in the wake of the Syrian/West Asian refugee crisis. The reforms were perceived as anti-democratic, lending further twist to a narrative far from the feared one of revolts turning a universal phenomenon. While the financial markets dread a possible Italian exit from the EU, there is a strong possibility the incoming PM may be pro-unity. India may have reason to sweat over the referendum result as it could impact trade, though the effects of such results are always known to be temporary, as seen in choppy stockmarket indices picking up later as things settle.