Italy was at an impasse yesterday after an election seen as crucial for the eurozone failed to produce a clear winner and provided a shock debut for a populist anti-austerity party, rattling world markets.
The Milan stock market plunged nearly 5 percent in early morning trading and Asian markets tumbled after center-left Democratic Party leader Pier Luigi Bersani scraped a razor-thin victory in the lower house of parliament, but the Senate remained up for grabs.
A majority in both chambers of parliament is required to form a government, leaving Italy in a state of limbo with a hung parliament.
European capitals fear the lack of a clear winner could bring fresh instability to the eurozone’s third-largest economy and plunge it back into a debt crisis storm.
Former Italian prime minister Silvio Berlusconi’s right-wing forces came a close second, winning 29.18 percent of the vote to 29.54 percent for Bersani in the lower house.
“The country which most needs stability will not have a government that lasts for more than a few months,” said James Walston, a professor of international relations at the American University in Rome.
A third force — the populist, anti-government Five-Star Movement of former comedian Beppe Grillo — won big, reaping a resounding protest vote from an electorate fed up with austerity policies and a grinding recession to score 25.5 percent in the lower house.
The big loser was outgoing Italian Prime Minister Mario Monti, who was drafted to run a technocratic government in the debt-strapped country after Berlusconi was ousted at the height of the financial crisis in 2011.
In contrast to Grillo’s shock success, Monti won just 10.56 percent in the lower house, the Chamber of Deputies. While he won praise in Europe, he was increasingly criticized at home for his austerity measures.
A victor’s bonus will give the left a handy majority in the lower house, but in the 315-seat Senate, neither left nor right has mustered a majority, with Berlusconi’s People of Freedom winning 116 seats and Bersani’s Democratic Party winning 113.
“Boom for Grillo, Italy ungovernable,” the headline in the left-leaning La Repubblica daily said.
The results spelled a “victory for a euroskeptic Italy in the face of the policy of economic rigor,” the Corriere della Sera said.