In what should have been a fairly innocuous referendum on the nature of Italy’s government has turned the EU upside down as Italy’s voters overwhelmingly voted no to the changes to the country’s constitution that Prime Minister Matteo Renzi proposed. Renzi did what he promised and resigned entering Italy and the larger EU into a period of political uncertainty. With populism on the rise across the continent, political leaders like Renzi who are advocates for greater federalism are finding their political futures cut short.
What Does this Mean for the EU?
Prime Minister Renzi was the last European leader left with a road-map for the EU’s future. Angela Merkel of Germany is too busy dealing with crisis after crisis and France is heading towards elections where the National Front is taking the country by storm. With Renzi out, the EU finds itself in uncharted territory as many of the member states face unhappy citizens as a euro-skeptic wave is rising across the continent. We are entering the waning days of what historians will call the failed EU experiment, which has been none other than Germany’s attempt at controlling the continent through economic measures. With Merkel on the ropes and increased banking instability, the EU may be headed towards a crackup.
How Will This Affect Israel?
The EU is Israel’s largest trading partner and a weakened EU can cause problems economically for Israel. That being said, the EU’s own support for BDS by labeling “settlement” products has already forced Israel to create a more versatile set of trading partners in the east. Partners like India, China, and Japan are rising stars in relation to Israel’s potential trade growth. The EU might still be a large part of Israel’s export economy, but not for long. As the EU enters the beginning stages of political and economic chaos, Israel will be ready to pivot as it has been doing during Obama’s tenure.[huge_it_share]