Referendum on December 4th Could Decide The Fate of The Euro
The Euro is poised to face a big test this week as Italians go to the polls to vote on constitutional reform which threatens to shake the entire Eurozone and place serious pressure on the European currency.
The bill, introduced by Italian Prime Minister Matteo Renzi proposes constitutional reforms to give more powers to the lower house of parliament while reducing the authority of the upper house Senate in order to strengthen the central government.
Renzi has promised to resign if the reforms don’t pass which would cause snap elections and may even possibly bring some Eurozone skeptical parties to power and likely cause investors to flee the Euro.
With opinion polls predicting a defeat in the referendum, the situation looks bleak and some are going as far to predict that this is the beginning of the end for Italy as a part of the European Union.
“We think the EU will break and that Italy will leave the euro,” said Jim Smigiel, a U.S.-based money manager at SEI Investments Co.
“Until a while ago this was just unthinkable, implausible, but we’re starting to see the wheels in motion, at the very least.” he added.
Jim Mellon, the chairman of the Burnbrae Group, who was one of the few to predict that Britain would vote to leave the Europe added that along with the European union, the Euro itself is on its last legs and he expects its demise fairly quickly,
“Brexit is going to be a sideshow to the problems of Europe that are becoming more and more evident,” he said
“The euro as it stands at the moment is just a very inappropriate mechanism, I give the euro between one and five years of life,” he added.
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