The future of the European Union is currently looking very shaky; the recent decision of the United Kingdom to pull away from the bloc has most certainly rattled the cage, but the implosion of this rickety structure is something that has been on the cards for a while.

 In the Financial Times, Wolfgang Munchau notes that while the Brexit vote will have “neutral to moderately negative” consequences for Britain, the real victim of the devastation to follow, will be the EU. The calls from Le Pen in France and HG in Holland to hold referenda on EU membership in their own countries that have been bandied around only minutes following Thursday’s result, do not even represent the main problem. Yes, it shows that the dissatisfaction with the EU as an institution is widespread and not confined to a “Cake-filled misery-laden grey old country”, however what it fails to underline is the real and significantly more acute, problem: the implosion of the Eurozone.

 The next referendum to be held in the EU, is that on constitutional reforms in Italy that has been scheduled by Italian Prime Minister, Matteo Renzi.  These proposals of “reforms to streamline the political system” are “sensible”, however they represent a gamble on the part of Renzi that is about as misguided and risky as that undertaken by David Cameron, the British Prime Minister. They represent the opportunity for a dissatisfied Italian public to cast a “midterm anti-government vote” as Renzi, unanimously unpopular, promised to resign if he lost. This situation bears remarkable resemblance to the Brexit vote, which in retrospect has been largely dubbed “a protest vote” towards various areas of discontentment with the EU.

 The implications of the Brexit on Italy offer some pretty tough pills to swallow. The knock on effect to growth within the Eurozone following the UK’s decision to leave, will be considerable, which to Italy, whose economy is still only in the green stages of recovery after a long recession, will mean a probable “reversion to a growth rate of below one percent or worse”, Munchau says. Equally dangerous to the stability of the Eurozone will be the impact of Renzi losing the referendum in October. The party that at present, looks the most likely to benefit from the current Italian Prime Minister’s downfall, would be the populist Cinque Stelle Movement, led by the anti-establishment Beppe Grillo, who has only this week, reiterated the movement’s plan to call a referendum on Italy’s membership of the euro.

 Given the general feeling of frustration in Italy against the current running of the country, reinforced by high levels of unemployment, a string of corruption scandals and a failure to put the economy back on the straight and narrow, a protest vote against Renzi seems all too probable. This coupled with Italy viewing “the EU’s economic governance most negatively” following a poll conducted by Pew Research Centre, does not bode well for the euro. Munchau goes one further, warning that “an Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period of time […] probably the most violent economic shock in history” that he expects would “dwarf the 1929 Wall Street Crash.”

 The EU as we currently know it is teetering on the edge, with imminent implosion threatening. Brexit may well have been the trigger, Italy could be the “next domino to fall” but the finger of blame cannot be pointed at individual countries – the real blame lies in the failure of the system, the eurozone and “its appallingly weak leaders, who have muddled on blindly rather than resolving the union’s multiple crises.”

dt