What is 'Italexit (Italeave)'

Italexit, short for "Italy exit," also known as Italeave, is an Italian derivative of the term Brexit, which refers to the June 2016 United Kingdom vote to leave the European Union. Other countries with extremist parties that have acknowledged their own versions of the possibility of leaving the EU include France (Frexit), Austria (Oustria) and the Czech Republic (Czech-out).

Each country's specific political interests depend on the country's situation and the extremist party's values. The prospect of Italy, the EU's third largest economy, leaving the Union, became more pronounced throughout the Spring of 2018 as national elections in March were inconclusive, essentially leaving the country without a ruling government.

During the last weekend in May, Italy's president, Sergio Mattarella, appointed former IMF official Carlo Cottarelli as interim prime minister until new elections are held in early 2019. As Italian president, Mattarella has the power to nominate the head of the Italian government and its ministers. He nominated Cottarelli after refusing to accept the nomination of Paolo Savona as finance minister. Savona represents the Five Star Movement, which has pushed Italy to break away from the EU. 

BREAKING DOWN 'Italexit (Italeave)'

Reasons for Leaving the European Union

Throughout Europe nationalist political parties have latched on to the idea of leaving the European Union. The sentiment for leaving is often related to a loss of sovereignty to the EU government in Brussels, high financial contributions to the Union and specific issues that can vary by country, for example immigration and healthcare.

While the majority of academics and mainstream politicians tend to argue for the European Union, the Brexit vote has inspired nationalist parties to intensify their efforts to split from the EU.

Italian Politics

At the forefront of Italexit is the Five Star Movement, started in 2009. The Five Star Movement is the second most popular party in Italy, behind the Democratic Party, which is led by Prime Minister Matteo Renzi. The Five Star movement was already gaining steam prior to Brexit, as the party experienced success in local elections, electing Virginia Raggi and Chiara Appendino as mayors of Rome and Turin, respectively. While the turnout was relatively low, the vote serves as an indication of the state of Italian politics.

Global Consequences

Italian political developments in May of 2018 rattled global markets as the prospect of a weakened EU was revived. Of central concern is the potential for Italy to default on nearly $2.7 trillion in debt, which could have a massive impact on other countries, banks and institutional investors.

The immediate consequences of the Brexit vote in 2016 were not favorable to either the UK or the EU. Global stock markets plunged. The UK's credit rating was quickly downgraded by the three major credit agencies: Standard and Poor's, Moody's, and Fitch, and the British pound hit its lowest exchange rate since 1985. Prime Minister David Cameron, who opposed Brexit, announced that he would step down and was succeeded by Theresa May. Similar political and economic turmoil can be expected from an Italian exit from the monetary and political union.

  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the ...
  2. Brexit

    Brexit refers to Britain's leaving the European Union, which ...
  3. Czech-Out (Czexit)

    Czech-out is a Czech Republic version of the term Brexit, which ...
  4. Currency Union

    A currency union is where more than one country or area shares ...
  5. Brexodus

    Brexodus refers to a potential spillover effect of Brexit whereby ...
  6. European Union - EU

    The European Union is a group of countries that acts as one economic ...
Related Articles
  1. Investing

    Why Spain's Sovereign Debt Is Outshining Italy's

    Spanish 10-year government bonds have been trading at a lower yield than Italy, which has significantly larger economy
  2. Investing

    How Did Italy Get To This Point?

    Italy is in the spotlight amid the eurozone crisis. Discover why and if the problems can be fixed.
  3. Insights

    Global Economics: Is Italy the Next Greece?

    Find out whether or not the Italian economy is poised to become the next Greece, and why much depends on the political will of Italy's leaders.
  4. Insights

    Countdown to Brexit: What Is Article 50?

    British PM Theresa May has triggered Article 50, and the divorce process has officially begun.
  5. Insights

    3 Economic Challenges Italy Faces in 2016

    Learn how Italy's economic problems are ingrained and systemic. Unless Italy implements drastic economic fixes, 2016 will be another year of struggle.
  6. Insights

    Brexit It Is; Markets Tumble

    The British people have voted to leave the European Union.
  7. Investing

    Brexit Is Gaining Momentum

    The Brexit referendum is less than three weeks away and the "Leave" camp is gaining momentum.
  8. Investing

    Brexit Has Slowed UK Growth 2.1% So Far: New Study

    The study negates Brexit supporters' claims that leaving EU would improve the govt. balance sheet.
  9. Insights

    The Impact of Brexit on General Motors (GM)

    Brexit, the result of the U.K. leaving the European Union, will have much impact on many industries. This article discusses how Brexit may affect General Motors.
  10. Trading

    G20 Leaders: Brexit a "Shock" to World Economy

    The G20 calls the potential of Brexit a "shock." Are the fears exaggerated?
  1. Do Shareholders Get a Say in a Firm's Operation?

    Stock ownership often provides a vote on board membership and other issues put out for shareholder approval. Read Answer >>
  2. What are the typical day-to-day responsibilities of a Chief Operating Officer (COO)?

    Learn how a country's debt crisis affects the world, including how currency values, inflation and output are affected on ... Read Answer >>
  3. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Learn more about its history. Read Answer >>
  4. What can shareholders vote on?

    Understand the usual voting rights of common stock shareholders, along with the importance of shareholders exercising their ... Read Answer >>
Trading Center