Italian state president Sergio Mattarella yesterday intervened in a burgeoning row prompted by remarks by the US ambassador apparently in favour of prime minister Matteo Renzi's forthcoming constitutional reform referendum.
On Monday, the ambassador, John Phillips, said that if the No vote wins the referendum, then this would represent a "backward step" for US investment in Italy. Mr Phillips argued the referendum guarantees badly needed stability in Italy, implying a defeat for Mr Renzi could plunge the euro zone's third-largest economy into uncertainty.
That analysis is based on the fact that, to some extent, Mr Renzi has linked his own political future to a Yes victory. Earlier this year, he said if the referendum does not pass, he will resign as prime minister.
Mr Renzi argues that by reducing the size and effective powers of the Italian senate, this reform will make government easier and more stable. It is not clear what Mr Renzi will do if he loses the vote, but obviously a defeat will weaken him and his coalition government.
US interference
In response to allegations of US interference, voiced yesterday by almost all Italian opposition forces, Mr Mattarella played down the issue, saying from Sofia,
Bulgaria
, where he was on a state visit: “We should live out this [the referendum] serenely, as with any democratic passage. In the end, this is the sovereign right of the Italian electorate and they will decide. In an ever more interconnected world, it is only normal there should be an interest in our internal politics, but at the end of the day the final decision rests with the Italian electorate . . .”
The US ambassador's remarks come in the same week it was confirmed US president Barack Obama is to host Mr Renzi at a White House state banquet next month, probably the last such dinner of his presidency.
That endorsement of Mr Renzi was echoed by US ratings agency Fitch which said victory for the No vote would be seen as "a negative shock for the economy and the Italian credit rating". One senior Rome-based diplomat said yesterday Mr Phillips's opinions are probably shared by colleagues and many chancelleries in Europe, with senior EU partners anxious Italy should avoid instability.
German support
After 30 months in office, the Renzi government’s reform programme has yet to yield significant dividends, while the economy is threatened by a zero growth rate and an impending banking crisis. Further support for the Renzi reform drive came yesterday from German government spokesman Steffen Seibert, who said chancellor
Angela Merkel
“supported” Mr Renzi in all his “diverse internal political activities . . . and in his reform programme”.