Brexit has revived expectations of referendums in other EU countries, backed by a number of opposition parties who see an opportuni-ty to reject ruling parties. There have been referendums in many countries in recent years. Slovenia, Slovakia, the Czech Republic, the Netherlands, Malta, Luxemburg, Lithuania, Latvia, Ireland, Hungary, Spain, France, Estonia (… etc) have held referendums on a European constitution, the Lisbon Treaty or their membership in the EU, while Portugal and Poland cancelled theirs. Scotland is a special case: it wants to get out of the UK and stay in the EU, and a referendum there has become highly likely. Many people in Scotland feel greater affinity with Europe than with Great Britain and would like to create an independent and European Scotland.
But things are not that simple. For one thing, the UK Parliament would have to green-light a referendum. For another, the transition period would be highly complex. First of all, Brexit includes Scotland. So not until the outcome of negotiations on the official exit of the UK would Scotland be able to request membership in the EU, assuming that it had become independent. This would be a long and uncertain process, involving the introduction of a national currency – not the GBP and probably not the euro, as Scotland would no longer even be in the EU. A real conundrum.
Things are not necessarily any simpler in the other countries. In Germany, the Basic Law has no provisions on referendums on changes in federal state borders, mergers or demergers. Any referendum would be held in the states concerned. However, legislation in some states and local communities provides for local referendums. The Belgian constitution has no provisions for referendums. In Italy, 500,000 signatures are needed to hold a referendum, but the process takes at least one year… and referendums on treaties are not currently possible and the constitutional court will probably not allow any. Same thing in Austria, where treaties are not subject to referendums. In France, a national referendum (Arti-cles 11, 88-5 and 89 of the Constitution) mainly covers legislation, treaties and constitutional issues. Only the president can call a referendum and, for the mo-ment, his mind is on the presidential elections (next April and May). It’s hard to see the Republican or Socialist parties taking this route after the presidential elections. Without the president’s consent, support must be obtained from at least 25% of members of Parliament (National Assembly and Senate) and at least 10% of the voters. In Finland, 50,000 signatures can force parliament to debate but it is not required to call a referendum. In Poland, 500,000 signatures are enough to trigger a referendum, which cannot call for rejection of the provisions of a European treaty. In Hungary, 100,000 signatures are enough to trigger a refer-endum, but there can be no referendums against an EU treaty or against the obligations flowing from an international treaty. Thus, we are unlikely to see a series of referendums but are likely to see these issues debated extensively.
Italy will hold a referendum on 4 December. The outcome will be critically important, both for the political future of Matteo Renzi, the current President of the Council of Ministers, and the likelihood of potential early general elections and the country’s political stability.
Global Head of Research
Head of Rates & FX Research