Italian Prime Minister Matteo Renzi threatened to step down if a December government-reform measure he seeks does not pass.

The reform will dramatically reduce the power of the Senate. It will also give a parliamentary majority to the party that gets the most votes. Renzi wants that authority.

Ironically, if the referendum does pass, Italy is more likely to leave the Euro than if it doesn’t. A graph of Italian Voter Polls shows why.

Opinion Polling for the Next Italian General Election

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Beppe Grillo’s Five Star Movement party (M5S) is now neck and neck with Renzi’s PD party. M5S is decidedly eurosceptic.

Should the referendum pass, but Renzi lose the next election, a eurosceptic party will have control over Italy.

Renzi’s gamble is that he will win the referendum, consolidate power ahead of the next election, and stave off election of M5S. That’s quite the gamble given how support for Renzi has collapsed.

Mike “Mish” Shedlock