Closed As it happened: Italian elections

Italians cast their ballots in a tight election, with Brussels, Berlin and the markets looking on. The end of the night brought the messiest outcome imaginable, and a second election seemed possible within months. Pier Luigi Bersani’s centre-left coalition held a slim lead in the lower house, but Silvio Berlusconi’s centre-right wing called for a recount. In the Senate, meanwhile, no party had enough seats to make a majority, even in coalition with Mario Monti’s centrists. For more coverage, read our full story on

By Tom Burgis, Lina Saigol, Ben Fenton and Shannon Bond with contributions from FT correspondents across Italy and beyond. All times are GMT.

Good afternoon.

Here’s how we expect the day to unfold:

Polls close at 3pm local time (2pm GMT). There will follow some exit polls, which tend to be highly inaccurate.

Interim updates from the counts for the Senate and the lower house are expected from 430pm and 630pm local time respectively, continuing through the night.

By late on Monday or early on Tuesday we should have a picture of the distribution of seats and initial talks on coalitions will be under way.

The German DAX 30 (+0.40%), the French CAC 40 (+1.58%), the Italian FTSE MIB (+2.33%) and the Spanish IBEX 35 (+1.83%) are moving higher on Monday ahead of Italian elections’ results.

Let’s go straight to Tony Barber, the FT’s Europe editor, who is in Rome and sends this:

Excitement mounts as the Great Pencil Controversy erupts a few hours before the polls close in Italy’s parliamentary elections. Beppe Grillo, the comedian and leader of the insurgent, anti-politician Five-Star Movement, just arrived at his polling station in Genoa armed with his own pencil for filling in his ballot. No way, said the local election official: use our pencils like every other voter. Grillo does as he’s told, perhaps calculating his token act of defiance will raise a few extra votes from citizens disgruntled with even small expressions of authority in today’s frazzled political climate.

Balloting closes at 15:00 Italian time, with the first exit polls expected shortly afterwards. Grillo wants 20 per cent or more of the national vote, a result that would underline the strength of anti-establishment feelings in the electorate and would weaken the legitimacy of whatever government might be formed by Italy’s mainstream politicians.

According to one TV poll this morning, 72 per cent of Italians don’t think the election will produce a government capable of running the country effectively. That’s because, unlike in the 2006 and 2008 elections, this is not a straight race between a broad centre-left and a broad centre-right coalition. Instead, you’ve also got Five-Star and a pro-reform centrist alliance led by outgoing premier Mario Monti. It’s not easy to see Pier Luigi Bersani’s centre-left Democratic Party (PD), even though it’s led opinion polls throughout the campaign, winning outright majorities in both houses of parliament.

Here’s what Riccardo Barbieri, chief European economist at Mizuho International, thinks:

“If the exit polls point to an outright PD victory or to a likely Bersani-Monti alliance, we would expect the markets to respond very positively… Vice-versa, if the polls point to a hung parliament, the Italian markets will probably experience a significant correction…”

This is where the official Italian election results will be posted through the day(s) and night(s) ahead…

Jamie Chisholm, the FT’s markets rune-reader says in his Global Markets Overview that Italy’s election is keeping investors cautious:

Dealers are keeping an eye on sterling, the euro and the greenback as the market’s fiscal, monetary and political sensitivities are heightened.

The pound is trading at $1.5133, compared with $1.5160 late on Friday, languishing at a 16-month low following the Moody’s downgrade. Gilts do not seem overly fussed, with implied 10-year borrowing costs up marginally to 2.12 per cent.

The single currency is up 0.6 per cent to $1.3266, though investors are wary about the result of the Italian election lest a hung parliament hobble the country’s ability to tackle its budget difficulties and trigger a resurgence of eurozone angst. For now, the mood is calm in credit markets, with Rome’s 10-year yields steady at 4.45 per cent.

The basics. Here are the four frontrunners, in vaguely the order they are expected to cross the line (Photos: AFP):

Pier Luigi Bersani, centre-left: can he secure a majority in both houses or will he be forced to the table with Monti?

Silvio Berlusconi, centre-right: mired in corruption and sex scandals but can he work his magic on the Italian electorate once again?

Beppe Grillo, anti-establishment satirist and blogger: wants 20 per cent of Italians to thumb their nose at the political class by voting for him

Mario Monti, centrist: life senator hopes to prolong his reforms as technocrat leader but is being punished by pollsters for his reign of austerity

Alberto Nardelli tweets:…306023896119910400

Back to Rome and FT Europe editor Tony Barber, who has this analysis of the all-important regional calculations.

If the protest vote is high, the three regions to watch closely are Lombardy and Veneto in northern Italy, plus the island of Sicily. Beppe Grillo’s anti-establishment movement won the most votes in last year’s regional Sicilian election – and not just because he swam across the Straits of Messina to launch his campaign.

There are 25 seats up for grabs in Sicily in the national election for the Senate, which has 315 seats in total. Veneto contributes another 24 seats but the big prize is Lombardy with 49. Control of the Senate will hinge to a large extent on how these three regions go. Expect the first Senate exit polls about 16.30 Italian time (15.30 GMT).

With its wealth, dynamic private sector and strong regional identity, Lombardy normally trends to the right – which in years past has played in favour of Silvio Berlusconi, leader of the People of Liberty party (PdL) and his populist Northern League allies. But the PdL and the League are mired in scandal in Lombardy – victory for them there is anything but a foregone conclusion.

Mario Monti, the outgoing Italian premier, is a native Lombard, but if he’s the “favourite son” of anywhere it’s Brussels not Milan, the region’s capital. The former European Union commissioner’s centrist alliance will surely need to get more than 10 per cent of the national vote to play a significant role in the next government. Anything less and it’s hard to see how Monti could serve as Bersani’s finance minister – as some governments elsewhere in Europe, anxiously awaiting the result, are crossing their fingers for.

La Stampa is preparing to chart what it sees as a five-way battle for electoral success:

PIMCO’s Nicola Mai, a sovereign credit analyst, notes:

“The biggest risk is a hung parliament, which could occur if Bersani or (much less likely) Berlusconi had a majority in the Lower House, but no one commanded a majority in the Senate. Such an outcome would likely lead to new elections within a few months. The tail risk is that Berlusconi wins an outright majority in both houses. But the probability of this happening looks very low, as Berlusconi’s performance would not only need to be very strong, but also broad-based across large regions,” Mai said.

The FT’s Giulia Segreti sends further analysis:

The regions of Lombardy and Veneto in the north and Campania and Sicily in the south will be crucial for the outcome of Italy’s national elections. The four battleground territories send a total of 127 members to Senate, 49 of which come from Lombardy alone, dubbed as the Utah – for importance- and the California – for size – of Italy.

A complicated system of premiums assigned on a regional basis in the Senate means that the party winning a majority of votes on national level, doesn’t necessarily obtain an definite majority in Senate.

Some of the scenarios are as follows:
- A win in all four key regions, on top of the remaining sixteen will secure an outright majority with 178 seats, well above the 158 seats out of 315 needed for a majority in Senate
- A win in all regions, except for Lombardy, would translate into a weaker majority, only 165 seats
- A loss in Lombardy along with another one of the four key regions, would mean falling short of controlling senate, with only maximum of 157 seats won.
- A loss in Lombardy, Sicily and Veneto would result in only 149 seats in Senate

First exit polls out, tweeted by Chris Adams, FT markets editor:

Sky Italia poll has Beppe Grillo on 19%, with Bersani’s coalition on 34.5% leading the Berlusconi group on 29%.

As the polls close, a dispatch from the FT’s Rachel Sanderson in Milan, in “Italy’s Ohio”:

Amid driving sleet and rain, bars and cafes are abuzz with expectations about the outcome of the vote as the close of voting draws near. With consumption levels at near 20-year lows, Luigi, a bar owner on Milan’s shopping thoroughfare via Manzoni, speaks for many Italian business owners when he says he desperate for “a new government to get people spending again”.

What inhabitants of Milan and the surrounding region of Lombardy want has become especially important this election. Lombardy, Italy’s most populous and wealthiest region, has become a bellwether for the outcome of the national vote. How Milan and the industrial region surrounding the city vote may well decide the outcome of the national elections.

Under Italy’s electoral rules, the party or coalition that takes the largest share of the votes for the lower house automatically wins 55 per cent of the seats. Polls suggest the centre-left Democrats, led by Pier Luigi Bersani, will probably take a majority in the lower house.

However, polls before a survey ban came into force last week pointed to the possibility of no outright majority in the Senate, with close contests in four or five major regions. Lombardy is the largest of these, with 49 of the Senate’s 315 seats.

Such is its weight in the election outcome, Lombardy has been billed “Italy’s Ohio”. But it might as well also be called Italy’s California because it accounts for a hefty fifth of Italy’s GDP.

A win by the centre-left in Lombardy, as some political hacks are predicting, wouldn’t be a huge surprise as they were slightly edging ahead before a poll blackout two weeks ago. A huge surprise though could come among the runners up. Hacks are suggesting the breakout story of the Lombardy vote could be the surge in popularity of Beppe Grillo’s anti-establishment Five Star Movement at the expense of the populist, rightwing Northern League.

Italy’s MIB index reacts strongly to the exit poll:

The FT’s James Fontanella-Khan in Brussels is looking a bit closer at the exit poll and what it may mean:

The FT’s Global Markets Commentator Jamie Chisholm looks at the immediate market reaction:

Traders have spent much of the session seemingly anticipating a “market-friendly” outcome to the Italian election. The euro was up 0.8 per cent to $1.3206 just prior to exit polls being released at 1400 GMT. It has since dipped to $1.3286. The ITalian stockmarket is happier, though, with the FTSE Mib extending gains to 3.5 per cent, while Roe’s bonds are seeing demand, pushing yields down 23 basis points to 4.22 per cent.

HEALTH WARNING: Italian exit polls do not have a brilliant record at predicting the final result.

BofA Merrill Lynch’s expectation of senate seat distribution:

Six reasons why The FT’s leader writer Ferdinando Giugliano would not trust national instant polls:

1) They are polls, not real results.

2) Italian pollsters have a pretty bad record with exit polls. In 2006, exit polls put the centre-left coalition ahead by 5 percentage points. The end-result was essentially a near-draw, with a 0.07% gap in favour of the progressive alliance led by Romano Prodi.

3) There are some well-known biases: for example, Italians who vote for Berlusconi tend to be less willing to say it.

4) There are some biases we don’t know: will Grillo supporters be telling pollsters who they have voted for?

5) This is a complex election: there are four groups, each with a decent chance of getting more than 10 per cent. Psephologists warn that this makes polls less stable.

6) This is a complex electoral system: to understand who has won the Senate, we need to know how each coalition has done in each one of Italy’s twenty regions. National polls won’t tell you that.

The received wisdom is that Lombardy will be the key to this election. The region that includes Milan, Silvio Berlusconi’s heartland, could make or break Bersani’s chances of forming a stable government.

See the 14.06 entry here by the FT’s Rachel Sanderson, who is based in Milan, on Lombardy’s role as the Ohio of Italy.

As the polls closed the interior ministry published its latest turnout figures. In the lower house election, turnout was 72.6 per cent, down six points from last time. In the Senate race, turnout was 71.82 per cent, significantly lower than 80 per cent last time (but then it is pretty chilly today in Italy)

Here’s the FT’s Alice Ross on the instant reaction on the currency markets.

The euro traded higher against other major currencies ahead of the outcome of the Italian elections, rising nearly 1 per cent against the dollar to touch over $1.33 and nearly 2 per cent against the pound. The moves came following a bad three weeks for the euro, which has slid against the dollar since the start of February with investor jitters over an uncertain Italian election outcome helping to stem the gains in the single currency seen last month.

“An outcome with the pro-reform centre left taking control of the upper and lower house will likely be seen as a euro positive, in our view,” said analysts at Morgan Stanley.

From the FT’s markets desk in London, Alexandra Stevenson sends this:

Italy’s benchmark FTSE MIB index of stocks jumped 3 per cent on the exit poll news, driven by strong gains in banking stocks. UniCredit, Italy’s largest bank, soared 6.7 per cent. The MIB still has some way to go, however, to regain losses of more than 4 per cent so far this month

Analysts at Natixis highlight the importance Mario Monti will play in how the markets will react to Italy’s election results.

“The central role of Mario Monti needs underlining, as it ensures him (as long as he chalks up a decent score) virtual guarantee of a major post in any government combination. [A] victory for the centre left, with a majority in the Assembly but not in the Senate: favourable. This option would necessitate an alliance with Monti (temporary Prime Minister) which would be welcomed by the markets.”

Now Citigroup sends its probable outcomes:

Bersani wins Senate majority alone 43%
Bersani needs Monti to win Senate majority 50%
}= 93%
Hung parliament (Berlusconi denies combined
Bersani-Monti a majority, or Berlusconi wins Senate)
Berlusconi wins Senate 0.36%
Bersani wins Camera 94%
Berlusconi wins Camera 6%

Back to Rome, whence FT Europe editor Tony Barber has been parsing the early exit polls. In short, it’s a shocker for Monti and all eyes on Lombardy:

An early exit poll suggests it’s victory for Pier Luigi Bersani and the centre-left bloc led by his Democratic Party (PD). The Milan stock exchange is already up 3 per cent, relieved that Italy may get a stable government.

But hold your horses. The outcome of the Senate race is not completely clear. Meanwhile, Mario Monti and his reformist alliance are trailing far behind in fourth place overall.

According to the exit poll for SkyTG24 news, the PD-led alliance is set to come first in the election to the lower house, the Chamber of Deputies, with 34.5 per cent of the vote. Because of Italy’s electoral system, which gives the winner bonus seats, the PD grouping would get 340 seats in the 618-member house – a decent majority.

In the Senate race, the PD and its allies are forecast to win 37 per cent of the vote, six percentage points above Silvio Berlusconi’s centre-right People of Liberty party and its Northern League allies with 31 per cent. If accurate, this prediction would give the PD-led grouping a very slim Senate majority – 163 seats out of 315.

But it’s unclear if this projection will turn out to be correct. At this stage the Senate contest in Lombardy is too close to call: the exit poll puts the PD and its leftist allies on 37.01 per cent and the centre-right forces on exactly 37 per cent. If Lombardy ends up in the centre-right’s camp, Bersani won’t control the Senate. That will make for a less than stable government, because under Italy’s constitution the Senate has powers exactly equal to those of the lower house.

But what about Monti and his centrist Civic Choice alliance? It is projected to get a dismal 9.5 per cent in the lower house race and 9 per cent in the Senate contest. Under the electoral system, Monti and his band might get no seats at all in the lower house.

Beppe Grillo and the anti-establishment Five-Star Movement are set for a comfortable third-place finish: 19 per cent in the lower house vote, 16.5 per cent in the Senate. That’s roughly twice as big a vote as has gone to Monti.

Courtesy of Alexandra Stevenson on the FT’s markets desk, here are some thoughts on what all this means for those all-important bond yields from Andrew Wilkinson, chief economic strategist at Miller Tabak.

“Italian government bond yields were already pre-empting a positive outcome with BTPs lower by 11bps ahead of the headline. Since then, yields have doubled their decline for the session further encouraging a risk-on attitude across the continent. The 10-year yield is currently lower by 23bps at 4.216% to its lowest so far this month.”

Not to be outdone by BofA Merill, Citigroup sends its analysis on probable outcomes:

Bersani wins Senate majority alone 43%

Bersani needs Monti to win Senate majority 50%
Hung parliament (Berlusconi denies combined
Bersani-Monti a majority, or Berlusconi wins Senate) 0.36%
Bersani wins Camera 94%
Berlusconi wins Camera 6%

Shares on Milan’s stock exchange surged 4 per cent on first polls from
Sky and Rai indicating a clear majority for the centre-left, reports the FT’s Rachel Sanderson in Milan. Several stocks, especially banks which hold huge reserves of Italian sovereign debt, rose so sharply they had to be suspended limit up.

This is an interactive Live Blog and we’d love to hear your comments and opinions

There has been a rush of excitement over the instant Italian polls. But the FT’s Brussels bureau chief is looking for his next high:

Back to Rome, from where Guy Dinmore, the FT’s bureau chief, has filed a first story on how things look now the polls have closed.

The first exit polls released after Italy’s general election showed the centre-left coalition led by Pier Luigi Bersani’s Democratic party heading to victory in the lower house of parliament but that the outcome in the senate was too close to call.

Milan’s stock exchange rose on the polls and was up 3.9 per cent on the day by mid-afternoon. The yield gap between Italian and German 10-year bonds narrowed slightly to 261 points on the news.

However, Roberto D’Alimonte, professor of politics at Rome’s Luiss university, cautioned that exit polls were unreliable. “I distrust exit polls entirely,” he said, adding that a better guide would be when the interior ministry started releasing partial results later in the afternoon.

The FT’s Europe Editor Tony Barber sends this observation:

Another exit poll, conducted for the newspaper Corriere della Sera by the Piepoli institute, tells a very similar story. The PD and its leftist allies seem assured of a lower house majority and will come first in the popular vote for the Senate.

Second will be Berlusconi’s PdL with the Northern League. Third place goes to Beppe Grillo and his internet-based insurgent movement. And far back in fourth place are Mario Monti and his pro-reform centrists, who are most to the taste of the European Union authorities in Brussels and, one suspects, to the German government.

So bleak is the outlook for Monti and company that it is unclear how influential a role, if any, they could play in a Bersani-led government. In which case it might be the radical leftist elements of Bersani’s centre-left coalition – the Left, Ecology, Freedom party led by Nichi Vendola – that would have stronger cards to play. Vendola might turn out to be crucial to protecting Bersani’s parliamentary majority in one vote after another.

This might work for a while, but Vendola’s party is no natural bedfellow of

Bersani’s. From a eurozone perspective, it would not easily translate into the kind of long-term, liberalising, pro-market, fiscally disciplined economic policies that Brussels and Berlin want to see from the next Italian government.

To Milan and the FT’s Rachel Sanderson, who has infiltrated the seat of Berlusconi’s main allies.

The mood is tense in the headquarters of the secessionist Northern League party on Milan’s outskirts as the initial poll forecasts show their centre-right coalition in a dead heat with the centre left.

Against a backdrop of posters proclaiming “The North First!”, discussion is already under way about what went wrong.

For a huddle of die-hard fans of the anti-immigrant league, what’s robbed them of a clear lead is Beppe Grillo’s anti-establishment Five Star Movement.

“We underestimated him. If there hadn’t been Grillo we’d already be celebrating our win,” says one middle-aged man who will only describe himself as a lifetime voter for Padania, a reference to the League’s term for an autonomous northern region.

There is a suggestion in some sources, such as @metapapero, a pollwatcher and political commentator based in Naples, that real results may show Beppe Grillo doing better in real life than polls show:

Beppe goes to the polls

Courtesy of financial reporter Fabrizio Goria, a rather dramatic representation of what a red Italy would look like:

And Lorcan Roche Kelly, chief europe strategist at the analysts Trend Macrolytics, has a note of caution for those now counting on a centre left win.

A quick recap on the arithmetic as we await the first official partial results, courtesy of the FT’s Giulia Segreti. The regions of Lombardy and Veneto in the north and Campania and Sicily in the south will be crucial for the outcome of Italy’s national elections. The four battleground territories send a total of 127 members to Senate, 49 of which come from Lombardy alone, dubbed the Ohio (for importance) and the California (for size) of Italy.

A complicated system of premiums assigned on a regional basis in the Senate means that the party winning a majority of votes on national level doesn’t necessarily obtain an majority in Senate.

Some of the scenarios are as follows:

Emoticon A win in all four key regions, on top of the remaining sixteen will secure an outright majority with 178 seats, well above the 158 seats out of 315 needed for a majority in Senate

Emoticon A win in all regions, except for Lombardy, would translate into a weaker majority, only 165 seats

Emoticon A loss in Lombardy along with another one of the four key regions, would mean falling short of controlling senate, with only maximum of 157 seats won.

Emoticon A loss in Lombardy, Sicily and Veneto would result in only 149 seats in Senate

It’s official folks, 1% of votes have been counted:…306062427764695041

Emoticon OK everybody. Full reverse thrusters please.

Projections put out by RAI are predicting that Silvio Berlusconi’s alliance will have the largest share of seats in the Italian Senate, not the centre left coalition.


We seem to be entering a period which could be described as advanced uncertainty:

The drinks could be on Silvio, according to Alberto Nardelli:

Our leader writer Ferdinando Giugliano can’t resist a told-you-so:

As the markets gyrate on the back of contrasting exit polls, we go back to Rome and Tony Barber, the FT’s Europe editor, who foresees split control of parliament.

Bersani’s hopes for a Senate majority – and thus a government that controls both chambers of the legislature – appear to rest on the outcome of the race in Lombardy.

That is because his centre-left alliance has clearly lost Veneto to Berlusconi’s centre-right forces, way ahead with a predicted 46 per cent of the vote. But it looks as if Bersani will pick up Sicily, where his alliance is projected to get 32 per cent, the centre-right 29 per cent and Beppe Grillo’s Five-Star insurrectionaries 23 per cent. Bersani is also on course to win Campania, the region that surrounds Naples and which has seen a closely fought contest.

In Lombardy there’s all to play for: it is neck and neck between centre-left and centre-right, with each projected at 37 per cent. Remember, Lombardy sends 49 senators to the upper house, with the winner collecting – under present projections – 27 of them. If Berlusconi and his allies squeak to victory in Lombardy, it’s safe to say the next Italian government will not have a Senate majority and will have a hard time passing an ambitious legislative programme.

In any case, it will take weeks for the next government to be formed. The new parliament will not convene until March 15. Its first task will be to choose speakers for each chamber. But if Bersani is to all intents and purposes the prime minister-elect, financial markets will want to know sooner than that who he has in mind to be his finance minister.

Whatever else the result signifies, it looks like anything but a popular endorsement of Monti’s 15 months in charge of a technocratic government. He saved Italy in its time of need, but where does he go from here?

Silvio Berlusconi said during the campaign that he would get drunk if Mario Monti — whose technocrat government the flamboyant former cruise-singer laid low — got less than 10 per cent of the vote. On current projections, Berlusconi may have a sore head in the morning…

In Italian, we are assured, the correct equivalent of a “reverse ferret” is the phrase “FERMATE LE ROTATIVE” – or “stop the presses”.

Currency markets are now fermate-ing the old rotatives:

Milan’s bourse, the MIB has now moved into negative territory. Earlier, when Bersani appeared to be heading for power, it rose by almost 4%. A lot of money being made and lost this afternoon.

Another calm, considered day in the Italian markets… The FT’s Alexandra Stevenson reports:

Italy’s benchmark FTSE MIB has dipped into negative territory as investors digest the latest election results. Most stocks have reversed all their gains and a number of banking stocks that had their trading halted on the way up have had their trading halted on the way down, revealing the extent of the volatility in trading today.

The FTSE MIB is down 0.3 per cent, having been almost 4 per cent higher.

The suspense is killing. It’s a cliffhanger.

Commenter Riccardo Borghi is providing some live data on the right. We appreciate the input.

Marco Zatterin, Brussels correspondent of La Stampa:

Back over in Rome, the FT’s Europe Editor, Tony Barber writes:

The Senate result is looking tighter and tighter. According to a second projection put out by the Piepoli institute, Berlusconi’s centre-right alliance is set to grab first place nationally with 31.6 per cent of the vote, the centre-left will come second with 29.4 per cent, Beppe Grillo’s Five-Star Movement will be third with 24.9 per cent and Mario Monti’s centrists will be a distant fourth with 9.2 per cent.

But this does not necessarily translate into an equal proportion of Senate seats for each group. What matters is the outcome in each Senate region’s contest. Lombardy is still on a knife-edge. Campania and Sicily now do not look like assured victories for Bersani’s PD and its leftist allies.

Keep the big picture in mind: the key issue is whether the mainstream Italian centre-left will be able to form a strong government, with majorities in each chamber, able to reinvigorate the economic reform course that started under Monti in November 2011 and then ran out of steam.

As of 17:00 Italian time, this prospect does not look assured.

RAI appears to be projecting a big lead for Berlusconi’s party in his native Lombardy, 38.8% over Bersani’s 27.6%. If the Senate race comes down to that region, that is pretty telling.

At the Rome headquarters of Silvio Berlusconi’s People of Liberty party, Daniele Capezzone, spokesperson, refrains from commenting the polls at such an early stage. The FT’s Giulia Segreti reports:

“We don’t comment them, both the positive ones and the negative ones.”

“We wait for real data, projections cannot be compared… and any analysis now risks being pure fiction.”

Latest numbers are being fed into the La Stampa graphic we illustrated earlier.

You can see it here.

The Europe correspondent of ITV News tweets:

Sounds like there has been a heel to the right in some parts:

With one-sixth of polling stations counted, the official website of the Italian government has Bersani ahead 34 to 27 over Berlusconi BUT and this is a big BUT, the earliest returning poll stations tend to favour left of centre candidates and Ferdinando Giugliani warns us not to read too much into this.

The FT’s Alphaville Editor Paul Murphy has this to say:


With one-sixth of polling stations returned, the official website of the Italian government’s election commission has Bersani ahead of Berlsconi by 34.5 to 27.3, BUT and this is a very big BUT, Ferdinando Giugliano, our resident expert, warns that those early polling stations have historically tended to favour left of centre candidate slates.

Many thanks to FT Live Blog reader Riccardo Borghi who points out a link to our chief world commentator Gideon Rachman’s blog:…italian-austerity/

James Fontanella Khan in Brussels has spotted this:

Back to the Northern League headquarters on via Bellerio on the northern outskirts in Milan. The FT’s Rachel Sanderson reports that the mood is improving as the latest projections show the centre-right ahead in Lombardy and in the Senate.

We’re expecting Roberto Maroni, leader of the Northern League and the centre-right’s candidate in Lombardy, to make an appearance sometime in the next hour.

Mr Maroni’s campaign, like Mr Berlusconi’s, had centred on tax promises. In the League’s case, it had pledged to keep 75 per cent of the taxes raised in Lombardy in the region.

In a recent interview with the FT while on the campaign trail, Mr Maroni said the tax pledge — which the centre-left have disputed — was all part of broadening the appeal of the league to small business owners from its folkloric, secessionist roots.

Silvio Berlusconi’s personal empire has also benefitted from the improving poll outlook for the centre-right. Shares in Mr Berlusconi’s media group, Mediaset, closed the day up nearly 2 per cent on the Milan stock exchange.

Emoticon Fassina, Bersani’s economics spokesman, has ruled out a “grand coalition”.

Senior officials from the PD are warning that Italy may have to go to the polls again. Could Italy be going down the same path as Greece, at least as far as repeated elections are concerned?

The Rome-based think tank CISE, headed by Professor Roberto D’Alimonte, one of Italy’s foremost psephologist tweets:…306078712426799104

Keep refreshing this page and you can watch the slow slide of Bersani’s lead as the Berlusconi coalition gets a bigger and bigger share of the vote.

The Italians are counting……

The FTSE MIB closed up 0.7 per cent at 16,351.99

Senate vote is 33.4 to 28.3 in favour of Bersani with 1/3 of districts counted.

An update from the Rome-based think tank CISE, headed by respected pollster Professor Roberto D’Alimonte (sezioni means polling stations, seggi means seats)

By the FT’s Tony Barber in Rome

This is, shall we say, not what Europe wanted.

Politicians in Pier Luigi Bersani’s centre-left Democratic party are openly acknowledging in Italian TV interviews that the election result may make it hard for them to govern the nation effectively. There may even need to be a fresh election, they are saying.

One can see the problem. According to the latest, fourth projection of the Senate result from SkyTG24 news, Silvio Berlusconi’s centre-right camp will top the national vote with 31.6 per cent. The Bersani-led forces will be second with 29.2 per cent. Crucially, Lombardy – the region with the most Senate seats – is within the grasp of the centre-right.

So even if Bersani and the centre-left get a majority in the lower house, they will not match that with a Senate majority. Yes, they could join forces with Mario Monti’s pro-reform centrists, but in terms of national popularity Monti’s camp looks a beaten force with a projected 8.6 per cent of the Senate vote. There is a legitimacy problem here for the technocratic prime minister, who made it his mission to crush what he saw as the snake of “berlusconismo”.

A second election need not, perhaps, be a disaster for Italy. A second vote was exactly what was needed in Greece last year to produce a more stable government – one that arguably commands more confidence from its eurozone partners than any since the outbreak of the debt crisis in Greece in 2009.

But the problem in Italy is that this election has revealed the country to be deeply divided between the right, the left and those who despise the political classes as a whole for their corruption and clientelism. In the Senate vote Beppe Grillo’s anti-establishment Five-Star movement is now projected to win 24.7 per cent. That means one in four Italian voters who went to the polls preferred him both to the old discredited politicians and to the reformist face of Monti.

The Interior ministry has said it expected to have final results for the senate by 21.00 and for the lower house by midnight.

With 38 per cent of Senate vote counted, Bersani is leading Berlusconi 33.1 to 28.7. That gap is narrowing all the time.

Our commenters are making the very good point that Beppe Grillo’s vote is making a big mess out of the traditional means of projecting results.

The FT’s Michael Stothard has been watching the markets closely:

It has been a wild day on the markets, with early polls suggesting a win for Mr Bersani pushing up Italy’s benchmark FTSE MIB index 4 per cent and pushing Italian 10-year government bond yields down 20 basis points to its lowest for a month. But in the final two hours sentiment turned sharply, with the the FTSE MIB falling nearly 3 per cent in just half an hour as new data came to light.

At the close of play the European benchmark Eurofirst 300 index was flat. Italy’s FTSE Mib was up 0.7 per cent, led by banking stocks, with Unicredit up 2 per cent. Italian 10-year benchmark sovereign bonds yields were up 11 basis points.

@rogerroger: as explained earlier, the results on the Interior ministry site, which are here are from polling stations as they come in. They have traditionally tended to favour the centre left, which means that they may be ahead now, but that lead will probably erode as the day wears on.

A rollercoaster of a day for Italian stocks:

The veteran political commentator and psephologist @profdalimonte is seeing deadlock in the Senate.

There’s some housekeeping going on in political offices as Italians prepare for the real business of coalition building that will (or at least may) follow the final count.

Enrico Letta, deputy head of Bersani’s party, has told Italian television:

“This possible outcome would have very heavy consequences for Italy at the European level.”

“Based on these projections, more than half of Italians expressed a vote against austerity, against the euro, against Merkel.”

The co-founder of @tweetminster, Alberto Nardelli, tweets:…306091317329555456

The electionista website, run by the aforementioned Nardelli, is making this prediction:

FT markets reporter Michael Stothard draws breath after a crazy session:

In the final two hours, sentiment turned sharply, with the the FTSE MIB falling nearly 3 per cent in just half an hour as new data came to light. Italian 10-year benchmark sovereign bonds yields are now up 15 basis points to 4.6 per cent.

Analysts and traders were in overdrive, bashing out notes out and consuming research in a desperate attempt to make sense of the patchy incoming data. “Lord, I wish I knew what what was happening,” said one bond trader early in the early afternoon, just as the markets started to turn.

Annalisa Piazza, analyst at Newsedge strategy, lamented that having a divided senate and house “would be the worst case outlook for the future political development of the country as a hung parliament would be a “guarantee” of stillness both in terms of economic programme and structural reforms.”

Commenter Riccardo Borghi has linked to a breakdown of how seat allocations in the Italian senate elections work out. A bit like the electoral college that puts presidents in the White House every 4 years.

The FT’s Guy Dinmore in Rome writes about how conflicting exit polls and projections after two days of voting has seen wild gyrations in the market.

With 54% of Senate votes counted, it stands at Bersani 32.78 : 29.41 Berlusconi.

Full breakdown on the government website.

The first survey of its kind into Italians backing the Five Star Movement published by think tank Demos in February, explains its popularity, revealing what the UK think-tank calls “astonishing levels of distrust in politics, business and the media among its online supporters”.

A detailed survey of nearly 2,000 Facebook fans of Mr Grillo, who has more than 1m “likes”, shows that only 8 per cent trust the government, 3 per cent trust political parties, and 2 per cent trust banks and financial institutions – lower on every measure than the Italian general public. The same is true of the mainstream Italian media, which Grillo regularly rails against, with only 11 per cent trusting the press and 4 per cent television, which is dominated by the state broadcaster and Mr Berlusconi’s Mediaset network.

Analysts Fabio Bordignon and Luigi Ceccarini, cited by Demos, found that 32 per cent of Five Star Movement voters define themselves as centre-left or left, and 28 per cent as centre-right or right.

Demos says the rise in the movement’s popularity is unparalleled for a new movement in western Europe.

“The combination of his charismatic anti-establishment rhetoric and the power of new social media to reach out to audiences beyond the confines of more traditional media has proved a lethal cocktail, and leaves him a force to be reckoned with,” concludes Jamie Bartlett, an author of the report.

FT leader writer and certified Italian Ferdinando Giugliano draws breath as we head into the evening and charts the possible outcomes from here — including the little-considered upshot for the Italian presidency.

Three hours after polls closed, Italy seems to be heading for a hung parliament.

The lower house will have a clear winner by tonight because of the electoral law, which awards 55 per cent of the seats to the bloc that gets the the most votes. The Senate is different. Because of a complicated electoral system based on how well alliances do in Italy’s 20 regions, the upper house looks likely to split three ways between Silvio Berlusconi’s centre-right coalition, Pier Luigi Bersani’s centre-left alliance and Beppe Grillo’s Five Star Movement.

There are two possible outcomes: either two of these parties form a coalition government or there is another election soon. But even if Italians were asked to vote again this year, this parliament would still have to choose Italy’s next president. Giorgio Napolitano is due to retire as head of state in the spring and has already announced he does not intend to stand again.

In Italy, the presidency is a largely ceremonial role. However, Napolitano was a key player during the autumn of 2011, when Italian bond yields spiked and Berlusconi, then prime minister, resigned to give way to Mario Monti’s technocratic government. The importance of this election should be under-estimated and, yet, as things stand its outcome looks extremely hard to predict.

So, will there be a coalition? And if so, who will be in it? It is too early to tell. But FT leader writer Ferdinando Giugliano is going to have a go anyway.

The answer depends on who will take the lower house. There, the alliance with the largest share of the vote will take 55 per cent of the seats automatically. The alliance that wins the lower house has a blocking stake: no one will be able to form a government without it.

In all likelihood, either Pier Luigi Bersani, leader of the centre-left, or Silvio Berlusconi, leader of the centre-right, will take control of the lower house. It will be up to the winner to try to form a coalition in the Senate.

The centre-left has already ruled out a grand coalition with Berlusconi. In theory, either group could seek an alliance with the centrist party led by Mario Monti. However, Monti’s party has been battered in the polls. He may not have enough seats to be a viable coalition partner.

Which leaves Beppe Grillo‘s Five Star Movement. Before the election, the Five Star Movement ruled out any alliance with Italy’s mainstream parties. Its platform was built around a message of disdain for Italy’s ruling class. It is unlikely Grillo will want to form an alliance with any of them.

The prospect of a new election could be the most realistic.

An arcane electoral process to choose the new steward of an institution tainted by scandal and popular disdain… Who will be chosen first, the new Italian premier or the new pope?

A very interesting analysis of how to read this election from La Stampa’s Antonella Rampino, translated by the newspaper’s website here.

Tensions are high as Italy awaits the results of its general election. Foreign observers may point out that things were no different in the recent U.S. presidential election, in which Obama was re-elected president. An Italian analyst may beg to differ, however, pointing to the complexity of the Italian election system – weak in terms of the communication of regional data, with notable delays in Southern Italy – and the unusual political context. Clearly, the only reliable piece of data is the final result, which could only be confirmed tomorrow morning. What complicates the process are above all the instant exit polls (which are known to be unreliable, particularly because the individuals interviewed tend to lie; Berlusconi’s supporters have never been keen on admitting they have voted for him and now a similar attitude has been adopted by Beppe Grillo’s (leader of the Five Star Movement) supporters, followed by the analysis of the projections regarding poll data: this data is also unreliable because the figure given is the total number of seats scrutinised but not the information regarding their distribution across the country.

Finally, the real complexity of these elections lies in the fact that in the last political elections held in 2008, there were two distinct “Poles”: the Centre-right led by Silvio Berlusconi and the Centre-left led by Walter Veltroni.

Now there are four magnetic “Poles”, so to say, attracting voters: Bersani’s Centre-left, Berlusconi’s Centre-right, Monti for Italy and Casini and Grillo’s Five Star Movement. Then there are the myriads of single parties.

Today’s Italian political system has been atomized. This makes the election process much more difficult and slows down the communication of the final voting result.

Our New York office has updated the Global Market Overview to take account of the effect of this confusing poll process on markets:

Havens are back in demand as an early rally for growth-sensitive assets has faded, with volatile swings in markets sparked by Italian election polls that suggest the country is heading towards a hung parliament.

Early gains across many markets have dissolved as investors turn to psephology to attempt to divine the outcome of the Italian general election.

Not everyone likes speculation about the outcome of this election, preferring hard facts. So with that in mind here is the Italian government word on things as they actually stand with 39,432 out of 60,431 wards reporting. It shows Bersani’s lead in the Senate vote eroding slowly. Now at 32.46 : 29.74 compared with 32.78 : 29.41 about 40 minutes ago.

Back to Rome and the headquarters of the Monti campaign, above which, reports the FT’s Giulia Segreti, hangs a pall of despondency.

Only a few steps away from the offices government, on the third floor of an large empty apartment, morale seems very low. Even reporters assigned to follow the results of the national vote from here seem disappointed by the latest projections.

In the Rome-based campaign of Mario Monti’s Civic Choice list, top members of the movement are meeting in order to establish a common line on the disappointing results that are coming from initial projections.

Just outside the locked door where the meeting is taking place, Mario Marazziti, former leader of the charitable foundation of Sant’egidio and now top candidate for the Monti movement in the region of Lazio, voices worries over the list’s inability to gain momentum.

Andrea Romano,candidate in the region of Tuscany, suggests that the winning party will have to seek support from Monti’s list. “The presence of many new forces in the political spectrum made pollsters get it completely wrong. Being at the polls for the first time, Civic Choice has obtained a result that will count anyway.”

Calling for reform of the electoral law, he adds: “We’ll wait and see the results for the lower chamber as the result for the senate does not look like there is a overall majority.”

The list was polling only 9.1 per cent in the senate race, according to initial results from the interior ministry. A spokesperson for the list said that it would not fall short of the 8 per cent threshold needed to enter the upper chamber.

As we await some clarity (don’t hold your breath) this excellent FT interactive graphic serves as a reminder of the economic malaise that is the backdrop to these Italian elections

Meanwhile, the job of leading another internationally important Italian institution falls vacant as Andrea Ragnetti, ceo of Alitalia, resigns, according to press reports in Rome.

Nicholas Spiro of Spiro Sovereign Strategy shares his quick analysis on the results so far:

The results of exit polls point to a slender victory for Mr Bersani’s leftist alliance in the lower house of parliament, a tie in the upper chamber, a very poor showing for Mr Monti’s centrists and a particularly strong performance by Mr Grillo’s anti-establishment Five Star Movement.

This looks like a recipe for total gridlock.

Based on current projections, financial markets are facing the worst of both worlds in Italy: a full-blown political crisis in the eurozone’s third-largest economy and a severe setback for the liberal economic agenda championed by Mr Monti.

At this stage, even the formation of a government is likely to prove a major challenge.

Given the resounding defeat for the most reform-minded party which investors had hoped would act as a moderating force in the next government, and the populist backlash against the country’s political establishment, the prospects for fiscal and structural economic reform in Italy appear to have been dealt a severe blow.

However, right now, the bigger issue is political instability.

The sharp rise in the yield on Italian 10-year paper this afternoon is more reflective of investors’ growing fears about political instability than it is about the policies of Mr Berlusconi, Mr Bersani or even those of Mr Grillo.

Investors, having priced in post-election stability in Italy over the past few months, are now confronted with a period of political instability, the severity and duration of which are uncertain at this stage.

M5S seems poised to make this genuinely the first internet election, with a spokesman telling Ansa, the official Italian news agency, that the party will “consult the internet” before deciding whether it could take part in a government with other parties.

As for Beppe Grillo, the party says it is independent of him, but “he is our megaphone, without him we wouldn’t be here”.

With 45,000 polling stations out of 60,400 reporting, the Senate vote stands at Bersani on 32.29%, Berlusconi on 29.96, Grillo on 23.86 and Monti with 9.20. Official govt numbers are here.

The results are on a knife-edge but one thing looks clear: another European electorate has delivered a stinging rebuke to the political establishment.

First, French voters sent a shiver through liberal Europe by casting almost one-fifth of their first-round ballots in last year’s presidential election to the far-right National Front.

Then, Greeks handed a second-place finish to leftwing firebrand Alexis Tsipras and his Syriza movement.

Today, Beppe Grillo joins the club: the satirist and blogger who has spent the campaign lampooning the national elite is poised to lead the biggest single party in Italy’s lower house (though not, of course, the biggest alliance).

The FT’s Giulia Segreti in Rome comments:

The Rome headquarters of the People of Liberty party buzz with reporters,cameras and MPs giving optimistic yet cautious declarations.

Among reporters and commentators, many say that the biggest winner, whatever the result, is certainly Silvio Berlusconi who has been able of “resuscitating” his party with a strong and aggressive campaign ahead of the national vote.

Fabrizio Cicchitto, party leader in the current lower chamber, is aware of the positive results of the centre-right coalition, but leaves final comments and political evaluations to tomorrow.

“Currently the result is optimal,” Mr cicchitto says, but he is weary of forecasts regarding the composition of the next government.

“The fact is that Mario Monti got everything wrong. He did not pick up the political offer of a great alliance with the moderate forces of the country,” he adds, referring to Mr Berlusconi’s offer of a broad coalition, including the centrist list of Monti as well as the People of Liberty Party, turned down by Mr monti.

According to Mr Cicchitto, among the reasons of a “miracle” is the electorate “who realised that not going to the polls would have translated into a victory of the left’.

No press conferences are expected yet and Angelino Alfano, party secretary who was given only a marginal role in the campaign, is nowhere to be seen yet.

La Repubblica tweets that one of Bersani’s spokespeople has said it is “possible” they could have a dialogue with Beppe Grillo about the future.

The latest projections for the senate, but based on 75% of the votes being counted.

Some initial thoughts from co-founder of @tweetminster Alberto Nardelli on what happens next:

We need to wait for final results to see who has a majority in the lower house, but that aside, there won’t be a majority in the senate needed to form a government. Italy will need to return to the polls in the near future.

A few challenges though for the new parliament:

it will need to elect presidents for both chambers

will need to support an interim/caretaker government

will need to elect a new president (who can then call an election) with a 2/3 (of parliament, lower house + senate, as a whole) majority – current President, Napolitano, may resign early to expedite this

will need to change the voting law

and will need to guarantee a minimum of stability in this interim period.

How the above will happen via ad hoc alliances and without a clear majority in the Senate, and the implications of all this, is anyone’s guess.

Enthusiasts for colour bar charts will enjoy Ansa’s version of the results analysis, although be warned, this page includes a prominent photograph of Beppe Grillo’s tonsils which some may find disturbing.

A little illustration of how much everybody hates the Euro in the wake of these election projections. Courtesy of

LordByron: it’s too early to tell not least because we don’t know what Grillo’s movement will do, and it is very hard to predict whether the normal horse-trading of Italian elections will apply. M5S probably didn’t expect to be playing the roles of kingmakers so soon.

It is a matter of some dispute, but we think that if Italy’s politicians (and non-politicians) manage to construct a new government, it will be the 64th since the end of the 1939-45 war.

Official government numbers show the Bersani coalition on 31.93 of the Senate vote, Berlusconi 30.36 Grillo 23.84 Monti 9.16. That is based on actual returns from 51,000 out of 60,000 polling stations but does not reflect the electoral college nature of the Senate. It is possible to win a plurality of the popular vote but not have control of the house.

Tony Barber is taking a step back to offer this assessment of the results as we know them so far:

Today’s Italian election result will be widely interpreted in Europe as a voter backlash against “austerity”. But I submit that the derisory vote for Monti and the surge in support for Grillo point to feelings among the electorate that go far deeper than resentment at the Monti government’s so-called austerity measures of the past 15 months.

First, the election took place in a context of ever-widening corruption scandals and disgust with the political classes that goes back many years in Italy.

The likelihood that Grillo would attract substantial support was foreshadowed by his Five-Star Movement’s success in a municipal election last May in Parma, a prosperous northern city tainted by scandal, and five months later in regional elections in Sicily. He did not owe these triumphs primarily to anti-austerity sentiment among voters.

Secondly, the argument that Monti’s failure stemmed from his belt-tightening economic policies glosses over an important long-term feature of Italian voting patterns – namely, that people are not very attracted to the political centre, which he represented.

The centre has struggled to make an impact ever since the disintegration in the early 1990s of the post-1945 party political system. The centre was not particularly strong even in the first four decades after the second world war: the dominant parties were the right-of-centre Christian Democrats and the Communist party.

Today, millions of Italians will always vote for the right, even for a Berlusconi-led right, because it fits their cultural identity. For the same reason, millions will vote for the left.

In other words, Monti was on a potential hiding to nothing, no matter what his economic policies. Austerity played a part in his defeat, but it was only one of several factors.

What is true, though, is that the election result showed very little appetite among Italian voters for the flip side of austerity – that is, pro-market liberal reform designed to boost economic growth. That, plus the deep-rooted corruption problem, is what should really be worrying Italy’s European allies.

Bersani’s number 2 rejects the idea of a new election in this Tweet. The main parties seem to be setting the scene for conversations rather than isolation.

An update from the FT’s Guy Dinmore in Rome in what many are calling Italy’s first “internet election”:

Celebrations were breaking out across Italy at the extraordinary surge of the anti-establishment Five Star Movement which was close to overtaking the centre-left Democrats as the single biggest party in the country.

With two-thirds of polling stations having filed their results, the Democrats were ahead in the contest for the lower house with 26.3 per cent of the vote, followed by the Five Star Movement on 25.5 percent, followed by Silvio Berlusconi’s People of Liberty on 20.7 per cent.

Jamie Bartlett, co-author of a detailed survey of Beppe Grillo‘s upstart movement for the UK think-tank Demos, commented: “These results mean that he, and the social media politics he has pioneered, can no longer be dismissed by his detractors as gimmickry. On social media, Grillo is the most followed politician in Europe: he has four times as many Twitter followers than David Cameron and he uses that enormous following to mobilise, recruit and get the vote out. This has allowed him to reach out to people usually uninterested in politics.

“Many of the concerns of Grillo’s supporters are shared by people across Europe and are reflected in declining trust in political institutions, falling political party membership and ever-lower voter turnout. This combination of anti-establishment rhetoric and new forms of communication could be a model replicated across the continent – including the UK.”

Both Mario Monti and Beppe Grillo are set to speak in about 20 minutes (at 20:30 GMT). Here’s Grillo’s tweet announcing his live stream to his more than 900,000 followers:

From Bersani’s base in Rome, the FT’s Giulia Segreti reports frustration and uncertainty:

The biggest party committee – a former aquarium built in the late nineteenth century and now the association of architects of the city – is the most frustrated about the partial final results of the elections.

the Democrats, favoured by all pollsters as the winning party of these elections, blame the lack of reform on the electoral law for the unstable scenario that seems to appear in both chambers of parliament.

Unlike their first, positive comments at the beginning of the instant polls, Democrat party managers are unwilling to give a final evaluation of the formation of the next parliament.

Enrico Letta, deputy secretary of the Democrats, is expected for a concluding statement of the day within the hour.

“We have more votes but because of that disgusting law it appears that we do not have the seats we were expecting,” says an unnamed party official.

” It is the confirmation that electoral law is penalising the Democrats while [Berlusconi's] People of Liberty party appear to be performing well with it”, the official adds.

“The country is in deep trouble,” she says, hoping that Italy does not need to return to the ballot soon.

It’s going to be a busy moment:

As we wait for appearances from the three big players, the FT’s Guy Dinmore sends this summary of the state of play:

Angelino Alfano, secretary of Silvio Berlusconi’s centre-right People of Liberty, hailed what he called an “extraordinary result” for a party that had been written off in opinion polls when the campaign opened last month. He said the party saw itself as having a “relative majority” in the senate where incomplete results indicated it would emerge with the largest number of seats but some way short of a majority.

Attention is now focused on the outcome of the contest for the lower house in parliament with partial results so far pointing to a narrow victory for the centre-left coalition led by Pier Luigi Bersani’s Democrats. Under Italy’s convoluted electoral system, the party or coalition with the largest number of votes is guaranteed 55 per cent of seats in the lower house.

For the moment it would appear that Italy is heading for a hung parliament.

Disregard the tweet below – Bersani will not speak until the results are certain. But we do expect the Democrats’ deputy secretary, Enrico Letta, to speak in the next half hour.

Quick update on voting: with 91 per cent of polling stations reporting, government figures show Bersani’s coalition with 31.84 per cent of the Senate vote, Berlusconi with 30.50, Grillo with 23.78 and Monti with 9.16. But, remember, those numbers do not reflect the electoral college nature of the Senate. It is possible to win a plurality of the popular vote but not have control of the house.

In the lower house, with 77 per cent reporting, Bersani holds 30.23 per cent, Berlusconi 28.51, Grillo 25.48 and Monti 10.55.

As Vivianne Rodrigues writes on our Global Markets Overview, Italy’s uncertainty is sending investors scrambling out of growth-sensitive assets and into havens.

The selling pressure on global stocks is boosting fixed-income “safety” plays in turn, with the yield on 10-year Treasuries down 9 basis points to its lowest level in one month at 1.87 per cent, she says.

Beppe Grillo is addressing the internet and the FT’s Ferdinando Giugliano is following along. The live stream is here.

From Reuters’ Naomi O’Leary in Rome:

And SKY News Europe correspondent Robert Nisbet:

Back to the markets – Bloomberg forex reporter Sara Eisen tweets out this dramatic chart of the Euro’s biggest drop against the yen in nearly 3 years:

Rome-based think-tank CISE points to Piedmont as a sign of where the Senate will be heading:

So what did Grillo say? The FT’s Ferdinando Giugliano has the quick take:

Beppe Grillo ruled out that his Five Star Movement would be part of “backroom deals” with Italy’s mainstream parties. Speaking on a radio managed by activists of his Five Star Movement, he thanked all the volunteers for what he defined as a “fantastic adventure”.

He called this election a “dress rehearsal” and accused Berlusconi and Bersani of having brought Italy to the “catastrophe”. He said the Five Star Movement MPs will watch closely their colleagues from Italy’s mainstream parties and press ahead with their programme, which include a “citizenship wage” for everyone.

“This was an adventure full of love” he concluded.

We’ve been talking all day about Lombardy – Italy’s Ohio or California, depending on how you look at it – and its importance in the Senate election. Now that Silvio Berlusconi has swept to victory in the region, the FT’s Rachel Sanderson in Milan sends this update:

Roberto Formigoni, outgoing governor of Lombardy and member of Silvio Berlusconi’s party, has said that “families and small business owners” are behind the landslide victory of Mr Berlusconi’s PdL in Italy’s largest region.

Latest polls indicate the centre-right led by Mr Berlusconi took 38 per cent of the vote in the region that’s been dubbed “Italy’s Ohio” because of its weight in the election outcome. Mr Berlusconi’s victory in Lombardy means that the centre-right looks set to take the largest number of seats in the Senate, leading to a hung parliament as the centre-left takes control of the lower chamber.

Lombardy was also one of three big regions to vote for a new regional president on Monday with results due to come in on Tuesday following the national elections results.

Mr Formigoni, who had to step down from his seat in Lombardy amid a series of corruption scandals, tells SKY TG24 that he expects the centre-right to retain control of the presidency of Lombardy in the absence of “any extraordinary event”.

Bersani’s deputy Enrico Letta has spoken, calling the vote a “rebellion” of the electorate.

The FT’s James Fontanella-Khan in Brussels sums it up:

It’s coming down to the wire and looking very close in the lower house, where Berlusconi’s centre-right coalition has narrowed the gap with Bersani’s centre-left group. With 89 per cent of the vote in:

- Bersani 29.78%
- Berlusconi 28.94%
- Grillo 25.49%
- Monti 10.60%

And in the Senate, with 96 per cent of polling stations reporting:

- Bersani 31.70%
- Berlusconi 30.65%
- Grillo 23.77%
- Monti 9.15%

With the spectre of a split vote looking more and more likely, Alberto Gallo, RBS credit strategist, says he sees three possible outcomes with polls indicating a hung parliament:

1. A ‘grand’ multilateral coalition

2. Another technocratic government

3. New elections

1. A large coalition is very unlikely. Neither Grillo nor Berlusconi appear willing to ally themselves with any other party. In addition, a large coalition is unlikely to continue the reform process due to strong disagreement on key issues among the major parties.

2. Another round of technocratic government is also unlikely. Technical governments in Italy have rarely lasted for more than a year. Monti’s government already exceeded that period and a continuation, even with different leadership, would be seen as a loss of sovereignty by the public.

3. The most likely outcome is a new round of elections over the next few months. This could see populist parties rise further, taking advantage of popular discontent and deteriorating economic conditions, as we have seen in the last few weeks.

Alice Ross, the FT’s currency correspondent, on a teachable moment:

And here’s that dollar-yen chart:

Now it’s Mario Monti’s turn to address the Italian electorate, which didn’t have much use for him today.

Here’s the FT’s story on the euro’s volatile session today.

The euro initially hit $1.3318, rising nearly 1 per cent against the dollar, as exit polls in Italy suggested that a centre-left coalition under Pier Luigi Bersani would prevail and continue with tough reforms and austerity measures to boost the nation’s struggling economy.

However, the single currency later sold off, falling almost 1 per cent against the dollar to $1.3074 amid reports that a centre-right coalition under Silvio Berlusconi had fared better in the polls than had been expected.

This raised the possibility that Mr Berlusconi, who has previously warned that the euro could still break apart, would return to power.

The reports also helped the single currency to lose earlier gains made against the Japanese yen, the euro falling almost 3 per cent to Y119.61.

James Fontanella-Khan, the FT’s man in Brussels, is not impressed with Monti:

From Rome, Giulia Segreti sums up the recent statement from Bersani’s party:

Enrico Letta, deputy secretary of the Democratic party, described the outcome of the elections as a “rebellion by the Italians against the costs of austerity” and said that a return to the ballot in the next months would not be a “feasible perspective”.

“With no clear majority in the Senate, the country will live a complex moment, hard to live and to manage,” Mr Letta said in the first official party declaration after the results of the elections. A speech by Pier Luigi Bersani is expected later in the evening, when final results for both chambers will be announced.

Mr Letta called for responsibility from the different parties and said that the situation had to be approached “step by step”. According to Mr Letta whoever is going to win a majority of seats in the lower chamber has “the duty to make a first proposal ( for a government)”, with the aide of the head of State.

With many votes to both the Five Star Movement and Silvio Berlusconi’s party, Letta said that Italians had been attracted by “demagogist proposals” and that traditional parties had sufferred from the long string of scandals of the last years.

The FT’s Rachel Sanderson notes that in the northern region of Piedmont, the latest figures from the Italian interior ministry are showing Bersani’s centre-left edging ahead of Berlusconi’s centre-right – “it looks like Piedmont is switching the weight of the Senate to centre-left”, she says.

With nearly 99 per cent of votes in, Bersani’s coalition holds 29.71 per cent of the region’s Senate votes to Berlusconi’s 29.43.

In voting for the lower house, Beppe Grillo’s Five Star Movement has overtaken Pier Luigi Bersani’s Partito Democratico as the largest party. 5SM has captured 25.53 per cent to PD’s 25.51 (Bersani’s coalition is still leading vote tallies, however, with a total 29.66 per cent).

Read tomorrow’s paper today – here’s Guy Dinmore’s piece on angry Italians saying basta to austerity.

The election’s outcome provided scant reassurance for Italy’s European partners, which want a stable government in Rome to pursue the economic reform course mapped out by the outgoing prime minister Mario Monti, the former EU commissioner who took power in 2011 at the helm of a cabinet of technocrats.

Instead, the fragmented Italian result adds to the uncertainty surrounding Europe’s efforts to overcome its sovereign debt and financial sector crisis and to restore economic growth to a region forecast to remain in recession this year.

Stefano Fassina, the centre-left’s economic affairs spokesman, said it was looking like there would be “no stable government” and predicted a return to the polls.

The biggest disappointment for Italy’s eurozone partners was the performance of Mr Monti and Civic Choice, his pro-reform centrist alliance, which finished a distant fourth. The centrists were set to take 10.4 per cent of the lower house and 9.1 per cent in the Senate – not even half that seized by comedian-blogger Beppe Grillo and his anti-politician Five Star Movement.

The strong support for Mr Grillo pointed to deep public discontent with a wave of corruption scandals that has in recent months swept over Italy’s political and business worlds. But the rejection of Mr Monti also indicated widespread disillusion with the tax increases and other austerity measures he introduced to stabilise Italy’s public finances.

Just when you thought it the knife edge couldn’t get thinner…

From Open Europe analyst Vincenzo Scarpetta:


The counting still goes on, but if true, this is the outcome many had expected…but perhaps not the way events unfolded tonight.

Here’s where things stand at the moment:

- In the lower house, Bersani’s centre-left coalition leads Berlusconi’s centre-right by less than 200,000 votes, or 0.5 per cent of the vote.

- The Senate is still too close to call – and it looks doubtful that anyone will pull off a majority.

- It’s been a banner night for Beppe Grillo and his Five Star Movement – they’re the biggest party in the lower house and surprised many watchers by their solid performance.

The FT’s Guy Dinmore writes from Rome on the surprise success of an unlikely political force, Beppe Grillo.

The anti-establishment Five Star Movement led by Beppe Grillo was on course last night to stage a huge election upset by polling the most votes of any single party.

With less than 2 per cent of polling stations to file their results from across the country, the Interior ministry said the Five Star Movement was leading with 25.53 per cent of the vote, just ahead of the centre-left Democrats on 25.47 per cent. Silvio Berlusconi’s centre-right People of Liberty was trailing in third place, followed by Mario Monti’s Civic Choice well behind in fourth place.

However the Democrats were narrowly on course to take a majority in the lower house of parliament thanks to electoral rules giving a majority premium to the largest coalition. The Democrats and their smaller allies were ahead with 29.62 per cent of the vote, against 29.1 per cent for Mr Berlusconi’s alliance. The Five Star Movement went into the elections alone.

In the Senate, where majority bonuses are allotted on a regional basis, neither the centre-left nor centre-right coalitions were close to securing a majority.

As you can see from the pictures below, the leaders of the major parties are all men. Al Jazeera English correspondent Barbara Serra noticed the same trend on Italian TV coverage of the election:

Hat tip to commenter Riccardo Borghi for drawing our attention to this post on why Berlusconi news is really monetary news.

CNN correspondent Tancredi Palmeri alerts us to a shift in the lower house tally:

The FT’s Giulia Segreti sends along a statement from Pier Luigi Bersani, leader of the Democrats, saying the “centre-left has won in the lower chamber and, by number of votes, in the Senate too”.

“It is evident to everyone that a very delicate situation for the country is opened. We will manage our responsibilities in the interest of Italy,” he added.

Bersani has now also taken to Twitter to declare victory – and “responsibilities” – for his coalition.

The interior ministry has posted final results for the Senate race in Piedmont (see 10:16), giving it narrowly to the centre-left, with 29.82 per cent over the center-right’s 29.29.

According to Eurasia group, the situation is “messy”, moving towards the pessimistic scenario of the centre-left coalition winning the lower chamber and no clear winner in the Senate.

“Clearly, both Monti and the centre-left have underperformed badly. The races in the large battleground regions that most pollsters had shown as tight (Lombardy, Sicily, Campania, Puglia, maybe Piedmont) have all gone to the center-right. This is fairly surprising, especially given the weather and turnout figures, ” reads a research note

“New elections in the short term would only benefit Grillo, as the Five Star Movement is clearly surging in the lower house and the Senate. The mainstream parties would be unlikely to give him a second chance at the polls for a while,” it adds.

Silvio Berlusconi’s return from political exile has at least one Twitter-er wondering what’s going on:

Courtesy of commenter Riccardo Borghi, a Sky TG24 graphic of the potential composition of the Senate:

(red=centre-left, blue=centre-right, light blue=Monti, yellow=Five Star Movement)

The vote is still incredibly tight in the lower house. Bersani’s centre-left holds a lead of just over 130,000 votes over Berlusconi’s centre-right – and the former prime minister’s party is not backing down.

The FT’s Guy Dinmore updates us on the scene in Rome:

Silvio Berlusconi’s centre-right party appealed to the Interior ministry late on Monday night not to declare a winner in the contest for the lower house, saying that incomplete results — with nearly all votes counted — showed their centre-left opponents leading by just 0.4 percentage points.

Angelino Alfano, secretary of the cente-right People of Liberty, read out a brief statement to reporters saying this result was within the “margin of error” and therefore “too close to call”.

“It is impossible to declare a winner of this election,” Mr Alfano said, demanding a review of the results.

The final outcome of the lower house vote is crucial as the coalition with the largest number of votes is automatically given a premium guaranteeing it 55 per cent of the seats.

According to the Interior ministry website, the centre-left coalition led by the Democrats was ahead with 29.55 per cent of the vote with all but 0.5 per cent of results filed by polling stations across the country. The People of Liberty was on 29.17 per cent.

Senior politicians in the Democratic party had already declared victory in the lower house.

Beppe Grillo reminds the FT’s US news editor, Gary Silverman, of another political upstart who launched from television fame. In Israel’s election last month, former TV presenter Yair Lapid led his party to a surprise second-place finish behind the rightwing Likud Beitenu bloc.

Just how much risk does this inconclusive election introduce to the euro? asks Alan Ruskin, analyst at Deutsche Bank.

The market almost certainly recognizes that Italy is no Greece. Berlusconi has said a lot of things about the EUR, including an exit would be a disaster and before this that the ECB should act as a guarantor for debt and print money to reflate; while Grillo has suggested that an Italian EUR exit is not taboo. Even with an array of conflicting statements, any follow-up election is still unlikely to be run on issues that are an overt referendum on Italy staying in the monetary union. The market is also less inclined to force the issue.

I expect that the market will be able to see beyond this Italian election in a way which is different to its struggles after last year’s first Greek election. Risk appetite will surely become choppier and dependent on how much Italian bond yields back-up, but US equities can still go higher in a way in which they could not when Greek uncertainty was most prevalent. Without additional inflammatory statements from politicians, Italy debt sustainability reopens the debate about the willingness of an electorate to make painful decisions, without markets enforcing pain.

Italian pollster Roberto D’Alimonte – professor of politics at Rome’s Luiss university – has put together this breakdown of the Senate seats. Centre-left has the lead, but even with Monti, they would not hold a clear majority.

Many Italians are still awake, waiting for the very last votes to be counted – and now Asia is waking up. In Japan, the Nikkei fell sharply at the open after the yen’s strong rise on Monday.

From Reuters:

Japan’s Nikkei share average fell sharply at the open on Tuesday, retreating from a 53-month high as the yen strengthened on uncertainty following the Italian elections, with shares of some big exporters to Europe tumbling.

The Nikkei dropped 2.4 percent to 11,379.92, and the broader Topix shed 1.9 percent to 962.53.

On Monday, the Nikkei had risen 2.4 percent to 11,662.52, its highest level since late September 2008.

From Rome, Guy Dinmore looks at what’s next for the Italian political circus:

Various options face Italy’s political leaders as they try to find a way out of the messiest election outcome imaginable.

But that first depends on one side accepting defeat, which should not be taken for granted.

The centre-left coalition led by the Democrats claimed victory in the crucial contest for the lower house where the coalition with the most votes is guaranteed a majority premium. But Silvio Berlusconi‘s centre-right appealed to the interior ministry not to declare a winner on the basis that the 0.4 per cent of votes dividing the two rivals was within the “margin of error”, and that results should be re-checked. The same could go for the Senate, where some regions like Piedmont in the north were decided by a small number of votes.

As the Senate result stands at the moment, neither the centre-left nor centre-right with about 114 seats each can form a majority in the 315-seat chamber, even if they were to make a coalition with Mario Monti’s centrists who fared dismally, taking only about 18 seats. Beppe Grillo‘s anti-establishment Five Star Movement, projected to claim some 58 seats, could make up the numbers but the Genoese comic leader of the movement has ruled out a coalition.

History buffs say Italy has had many weak short-lived governments (more than 60 since the second world war) but a hung parliament is uncharted territory. Italy has never gone straight back to the electorate after an inconclusive outcome like this.

Although the first reaction of many analysts and indeed some leading politicians was to predict another election within months, on reflection they might have second thoughts.

Loretta Napoleoni, an economist close to the Five Star Movement, is convinced that Grillo’s camp would do even better in a re-run.

Unless Berlusconi is confident his own People of Liberty would emerge victorious a second time, he might consider offering a grand coalition with Bersani – at a price of course that would doubtless include important ministerial posts and probably not Bersani as prime minister. Can the two parties divided by their deep-seated animosity but united by their fear of Grillo reach some kind of compromise?

It is not inconceivable. After all they did work together, sort of, in supporting Monti’s appointed technocrats for 13 months, until Berlusconi pulled the plug in December. A grand coalition would perhaps calm frayed nerves in Europe and on markets for a while, but the chances of implementing significant reforms to lift Italy out of recession is a much remoter prospect.

After a long day of reversals and re-reversals, we’re going to call it a night. Stay tuned for more coverage tomorrow on the blog and elsewhere on, where our reporters and commentators will have a heap of news and possible paths forward to discuss.