Italian voters’ defeat of a referendum on constitutional reforms cannot be compared to Britain’s vote to leave the EU, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said yesterday.
Policymakers will still look closely at the consequences of Italy’s decision, Villeroy, who is also governor of the Bank of France, told a seminar in Japan.
Villeroy also warned Britain that there would be no “cherry-picking” on market access as it negotiates its divorce from the EU.
Photo: Reuters
Former Italian prime minister Matteo Renzi yesterday resigned after suffering a crushing defeat on Sunday in the referendum on constitutional reform, tipping the euro zone’s third-largest economy into political uncertainty.
“The referendum in Italy yesterday [Sunday] may be deemed as another source of uncertainty,” Villeroy said.
“However, it cannot be compared to the British referendum: Italian people have been called to the polls to vote on an internal constitutional matter and not on Italy’s long-standing EU membership,” he added.
The euro tumbled to a two-year low after the referendum as Renzi’s resignation could give anti-eurozone parties a chance to gain power, further threatening European integration.
In contrast, Villeroy expressed confidence in the resilience of the eurozone, citing progress in merging banking regulations, improving economic growth and a tightening labor market.
The ECB meets on Thursday in Frankfurt, Germany.
At that meeting the ECB is likely to extend its bond purchases beyond March and consider sending a formal signal that the program will eventually end, senior sources with direct knowledge of discussions have told reporters.
Before the Italian referendum, central bank sources told reporters that the ECB is ready to temporarily step up purchases of Italian government bonds if the referendum sharply drives up borrowing costs for the eurozone’s largest debtor.
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