Early results from the Italian elections point to a huge protest vote that will leave none of the major parties in a position to form a strong majority in both houses.
While the center-left group of Pier Bersani had a slim lead in the last poll taken before official polls were banned, it seems as if it will not turn into a situation where he could form a majority government in both houses. Silvio Berlusconi was gaining on Bersani, but even more dramatic was the rise in votes for the Five Star Movement of Beppe Grillo, a stand-up comic.
The early results show the protest vote for Grillo to be quite large, as many Italians are fed up with all the major parties and with the economic hardships imposed upon most Italians. They are fed up, too, with rampant corruption in the political system.
With more than two-thirds of the votes counted, Bersani's group appears to have a slim lead in the lower house, but in the upper house (or Senate), no group appears close to being able to form a majority. Even in coalition with Mario Monti's group, Bersani would not have a majority in the Senate. The result would seem to be gridlock in the system at a time when strong government is needed to tackle the Italian debt crisis.
Earlier today, Italian markets rose on hopes that a strong center-left government led by Bersani and perhaps backed by Monti's group would come to power. When the prospect faded, the markets tumbled. These hopes were dashed by the huge success of Grillo, who made vague election promises and was backed by a team of mostly unknown candidates. However, not being a known politician is a political plus in these times in Italy.
Bersani has been humiliated. Going into the election he had a clear 10-point lead against his main competitor, Berlusconi. Berlusconi appears to be actually leading in the Senate race. A slight lead in the lower house race and the strange rules in Italy's election system will guarantee the party with the most votes a 54 percent majority in the lower house.
In the Senate the situation is quite different. Projections on RAI state television as this article is written show Berlusconi's party winning 112 seats, with Bersani's party winning only 105. Grillo's movement won 64, and Monti trails badly at only 20.
Investors rightly fear these results. Both Berlusconi and Grillo ran on anti-euro policies. They received together more than half the vote. There may very well be a need for new elections soon, as happened in Greece. Italian bonds have already felt the effects of the election; the spread between Italian and German bonds went from 260 basis points to over 300.
Mario Secchi, a candidate for Monti's centrist group, said, "These projections suggest that we are heading for an ungovernable situation."
Both Berlusconi and Grillo were able to take advantage of anger at Monti's austerity programs, even though Berlusconi is himself a billionaire media tycoon. Paolo Gentile, a Rome lawyer who voted for Grillo's Five Star Movement, said: "I'm sick of the scandals and the stealing. We need some young, new people in parliament, not the old parties that are totally discredited."