Italy steps back from euro referendum threat

Italy’s deputy prime minister and leader of the governing 5-star Movement has dismissed talk of a referendum on leaving the euro, easing fears of a hugely destabilising vote that could have ruptured the eurozone.

They had been raised by 5-Star founder Beppe Grillo, who last week said Italy should have a “plan B” to quit the eurozone if economic conditions dictated and that Italians should vote in a referendum to see if a majority wanted to quit the currency.

The new populist government “has spooked investors concerned that Italy may be headed toward an exit from the euro common currency”, says Bloomberg. Reuters reports that Grillo’s latest comments “sent ripples through financial markets”.

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The former comedian-turned politician has upended decades of political consensus in Italy with his anti-establishment movement, and although he holds no official post in the coalition with the far-right League, his comments still carry huge weight with his army of supporters.

His calls for a referendum on the euro date back some years and contrast sharply with the official cabinet position set out by Prime Minister Giuseppe Conte, who has repeatedly denied the government’s desire for a plebiscite on the issue.

Renewed talk of a vote prompted the latest intervention from deputy prime minister Luigi Di Maio, who said in an interview published on Sunday that it was not in the governing coalition’s contract and will not be pursued.