Fresh euro crisis as Italy rejects austerity and protests by voting for party led by ex-comedian
More than a quarter of voters backed the Five Star Movement led by comedian Beppe Grillo The centre-right alliance of controversial former prime minister Silvio Berlusconi took 31 per centThe centre-left groups, led by Pier Luigi Bersani, had just under 30 per cent of the vote
14:26 GMT, 25 February 2013
00:07 GMT, 26 February 2013
The euro was heading for a fresh crisis last night as Italian voters recorded one of the biggest protest votes in modern times.
In a rejection of the austerity reforms needed to ease the country’s massive debt, more than a quarter of voters backed the Five Star Movement, led by comedian Beppe Grillo.
His anti-euro and anti-austerity party, which had almost 27 per cent of the early votes, could end up being the single biggest group in parliament.
Choice: The split between the centre right forces of Silvio Berlusconi (left) and the centre left forces of Pier Luigi Bersani (right) raised the real prospect of a fresh election
The centre-right alliance of
controversial former prime minister Silvio Berlusconi took 31 per cent.
The centre-left groups, led by Pier Luigi Bersani, had just under 30 per
cent of the vote.
This split raised the real prospect of
a fresh election – and further delay to much-needed economic reforms in
the single currency’s third largest economy. As soon as results started
to be declared last night, the euro began falling against the dollar
and the yen.
Looking positive: Five Star Movement leader and comedian Beppe Grillo and his wife Parvin Tadjik
The single currency has rallied strongly in recent weeks as fears of an imminent break-up of the eurozone eased.
But analysts said a change of
government in Italy – and the possible return of Berlusconi – could see
the austerity measures implemented by outgoing leader Mario Monti
reversed and plunge the economy deeper into crisis.
Problems in Rome could increase fragility elsewhere in the eurozone.
The Five Star Movement, which is not
running in a coalition, has come from nowhere in three years to secure
the vote of one in four Italians.
Competition: Mario Monti casting his vote- Mr Monti's party is expected to gain fourth place
Its 64-year-old leader, Mr Grillo,
attracted hundreds of thousands of supporters as he toured town squares
in a camper van. Much of his support comes from young Italians, who are
frustrated by never-ending corruption scandals – and mobilised by
Earlier exit polls had shown the
centre-left coalition ahead in both houses. But early optimism from
market investors soon evaporated once later projections pointed to a
lead for Berlusconi’s centre-right coalition.
The former premier, who resigned 15
months ago after bringing Italy to the brink of economic ruin, has made
an astonishing comeback.
His trial, on charges of paying for
sex with an underage girl, has been postponed until after the election.
Mr Bersani, a former communist, would have to win both houses to form a
stable government. He has said he would continue with reforms begun by
technocrat Mr Monti.
Decisions: People read electoral information banners in a polling station in Rome during Italy's general elections
The country is likely to endure political horse-trading over the next few days to try to appoint a government.
If no party can form a majority,
another caretaker technocratic government may have to take power until
fresh elections can be held in May.
Robert O’Daly, of the Economist
Intelligence Unit, said: ‘Under a scenario where the combined
parliamentary representation of Mr Bersani’s centre-left and Mr Monti’s
centrists is insufficient to form a majority, a period of minority
government followed by further elections would be likely.
‘Such an outcome would place strong
additional upward pressure on government borrowing costs. If this were
to continue for a prolonged period, it could be destabilising for other
distressed peripheral euro area countries.’