Results are still coming in (and we’re following the FT live blog to keep tabs on the latest) but the Italian elections seem to have resulted in a big win for Silvio Berlusconi. While he’s nowhere near able to build a government on his own, the results up to now seem to indicate that he’s blocked the attempt of the united Italian left to win majorities in both the lower and upper houses of the Italian parliament. Without Il Cavaliere, as the bunga bunga king is sometimes known, there can be no stability in Italy.
More broadly, the vote is a huge defeat for the European Union and the euro. The concept of condemning Italy to years and perhaps decades of wrenching economic pain in pursuit of monetary union in Europe was decisively rejected as the Davos candidate Mario Monti went down to a humiliating defeat with, so far, less than ten percent of the vote.
None of the three biggest blocs (the left, Berlusconi and the upstart Five Star Movement) embraces the Monti program of retrenchment, austerity and reform. For some it’s the austerity, for others the reform and for many it’s the whole package, but Italy as a country doesn’t want the medicine the doctors in Brussels think it needs.
What happens next is up in the air; it’s not clear if Italy can form a new government at all, much less which parties would be in it. Right now, most of the smart money thinks another round of elections will be coming soon, and investors have been dumping both stocks and the euro.
Politics in the EU these days is more and more about gaps: the gap between the north and the south, between Britain and the rest, between voters and the establishment. Those gaps seem to be growing over time, and the establishment seems adrift. That is not a recipe for success.