A man gives thumbs up in front of an election campaign poster of the presidential candidate Norbert Hofer from the far-right Freedom Party (FPOe) in Vienna, on August 31, 2016. Austria will re-run its presidential election on October 2. / AFP / JOE KLAMAR (Photo credit should read JOE KLAMAR/AFP/Getty Images)
A supporter stands in front of an election campaign poster of far-right presidential candidate Norbert Hofer in Vienna © AFP

Nationwide votes in Austria and Italy on December 4 are causing palpable anxiety in Europe that, as in the Chicken Licken folk tale, this will be the day when the sky starts falling.

Austria will re-run its presidential election, which in May a far-right candidate came within a whisker of winning. Italy will hold a constitutional reform referendum on which Matteo Renzi, prime minister, has staked his political prestige.

Alarmists fear that victory for the Austrian far right and defeat for Mr Renzi will signal that Europe, no stranger to anti-establishment insurgencies, is being submerged by a populist tide washing in from the Atlantic. This tide swept Britons in June into voting to leave the EU and last week lifted Donald Trump to the US presidency.

In the context of rising populism, Austria’s election is arguably the more worrying event. No European democracy has elected a far-right head of state since the second world war. The symbolism of such a breakthrough in Austria, annexed to Nazi Germany from 1938 to 1945, would be immense.

Yet financial markets seem more unnerved by the prospect that Mr Renzi will lose the referendum, as opinion polls suggest. They fear political drift that will hobble efforts to stabilise Italy’s fragile banking sector. Those risks are real, but a defeat for Mr Renzi might be a blessing in disguise.

His proposals involve reduced powers for the Senate, Italy’s upper chamber, and an overhaul of the state to strengthen central institutions. These proposals are tied to an electoral law, the Italicum, which came into force in July.

epa05623998 Italian Premier Matteo Renzi attends a meeting with city mayors who are in favour of the reform to overhaul Italy's political machinery in Rome, Italy, 09 November 2016. The national referendum over whether to accept or reject the government's constitutional reform law will be held on 4 December. EPA/GIUSEPPE LAMI
Prime Minister Matteo Renzi attends a meeting with city mayors who are in favour of the reform to overhaul Italy's political machinery © EPA

The Italicum awards bonus seats to the winner of parliamentary elections, guaranteeing it an absolute majority for a five-year term. Crafted to ensure that power will rest with Mr Renzi’s centre-left Democratic party or its centre-right opponents, the Italicum may backfire spectacularly on its creators.

Should Mr Renzi’s reforms pass and the Five Star Movement of Beppe Grillo, a comedian-blogger, win elections due in 2018, this idiosyncratic movement would control both government and parliament until 2023. For a taste of what might be in store, consider Mr Grillo’s verdict on Mr Trump’s triumph: “It is those who dare, the obstinate, the barbarians who will take the world forward. We are the barbarians!”

If Mr Renzi loses the referendum, the risk that Rome will fall to the barbarians will diminish. The failure of his proposals would undoubtedly oblige Italy’s politicians to revise the Italicum to exclude the risk of a Five Star electoral landslide.

Austria’s election pits Norbert Hofer of the far-right Freedom party (FPÖ) against Alexander Van der Bellen, a candidate backed by the Greens. Made necessary by vote-counting irregularities in May, the re-run looks too close to call.

Voters in April’s first round repudiated the two-party system of Social Democrats and the centre-right People’s party that has dominated Austria for 60 years. Without being in any sense ultrarightists, many voters regard this system as self-serving and out of touch.

To attract votes, the FPÖ is whipping up anti-immigrant, Islamophobic sentiment. But Mr Van der Bellen has strong support in Vienna and other cities where liberal voters spearheaded the humane reception given last year to refugees who poured across Austria’s frontiers. In May just over 30,000 votes separated the two candidates. Mr Van der Bellen’s winning margin was 50.3 to 49.7 per cent.

A Hofer victory would give the FPÖ every chance of winning real executive power in Austria’s next parliamentary elections, due by 2018. And it would be a shock for Europe. There is no room for complacency about how he might wield the presidency’s generally limited powers.

tony.barber@ft.com

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