In the midst of an eventful night, our Italy correspondent Stephanie Kirchgaessner has paused to ponder what is next for the country?
Traditionally, a grand coalition – like a forced marriage of rivals – could be brought together relatively easily by joining the country’s two big traditional parties, the centre-left Democratic Party led by Matteo Renzi, and Forza Italia on the right led by Silvio Berlusconi.
But those traditional parties are not expected to have enough support on their own to create parliamentary majority, according to early results. Exit polls and early projects on Monday morning revealed that as many as 50% of Italian voters supported populist parties.
The Five Star Movement, once laughed off as merely a protest party, is expected to emerge as the single biggest party, with up to 33% of the vote. La Lega, previously known as the Northern League, also appeared to have performed better than expected.
Those parties, once seen as fringe movements, will likely have to play a role in whatever coalition is created for the new government in order for it to look reflective of the election results, analysts say. The calculation is complicated in large part because the Five Star Movement has always traditionally said it would not take part in a coalition government.
You can read her full analysis here:
Euro trades lower as markets digest the polls
The euro is set for a choppy trading session after the strong showing by the 5-Star Movement and other populists. The single currency jumped earlier when it was confirmed that Germany had finally got itself a new grand coalition.
It reached $1.23655 but has fallen 0.1% in the last hour or so to $1.2309 as traders digest the significance of a likely hung parliament after an election that saw more than half of the country’s voters back parties outside the mainstream. It’s now up slightly against the pound at €1.118.
Holger Zschaepitz (@Schuldensuehner)
Euro turns negative as #Italy election could become a major headache for #Eurozone. pic.twitter.com/wz537Ia8c5
March 4, 2018
M5S until recently supported a referendum on whether Italy, the eurozone’s third biggest economy, should withdraw from the currency bloc. And while it says the time for such a vote has passed, the rightwing League still wants Italy to pull out.
The group formerly known as the Northern League is in Silvio Berlusconi’s coalition, which is projected to have won about 36% of the vote, and could form the next government.
Drew Liquerman (@DrewLiquerman)
The #euro is trading lower as markets continue to digest the populist and anti-EU surge / victory in the Italian election polls and seat projections https://t.co/axXhaMVHyJ pic.twitter.com/EAlKFJWTFw
March 5, 2018
Hung parliament 'most likely outcome' - analysts
Analysts say early projections from Italy’s election indicate that a hung parliament is the most likely outcome and that the anti-establishment 5-Star Movement’s strong showing may send a negative signal to financial markets.
Wolfango Piccoli of the Teneo consultancy told the Associated Press that building a majority in the Italian parliament “will be hard if not impossible,” and that tough negotiations were expected.
The early projections had the 5-Star Movement as the strongest single party but a centre-right coalition comprising three parties was leading overall. Neither have enough of a lead to govern alone.
Economic analyst Lorenzo Codogno, a former Treasury official, said the 5-Star’s showing was better than expected and that “financial markets are likely to take these figures negatively.”
He warned that talks on forming a government would be “long and complex.”
The Associated Press reports that a senior leader of the Five Star Movement has hailed the exit poll data as a “triumph” for his party.
Addressing supporters early on Monday, Alessandro Di Battista said the anti-establishment movement was the leading party in Italy’s election.
But the 30% support indicated by a RAI state TV exit poll is far short of the absolute majority needed to form Italy’s next government.
M5S has officially vowed not to join any post-election coalitions. But Di Battista welcomed other parties to come talk as long as they use Five Star “methods” of “transparency” and “correctness” in political conduct.
One possible partner is the anti-migrant League led by Matteo Salvini. He is jostling with Silvio Berlusconi for leadership of the centre-right bloc.
Updated
Populist parties gain lion's share of support
Our Italian correspondent Stephanie Kirchgaessner has wrapped up the developments so far. The main message is that Italian voters, who have traditionally been risk averse, are ready to ditch the big mainstream parties, and that the centre-left party headed by Matteo Renzi has had an abysmal election.
About 50% of Italians who voted in the national elections supported populist parties that were once considered fringe, according to early election exit polls and voter projections.
The most likely result of the national election seemed either a win by the centre right coalition headed by Silvio Berlusconi, the 81-year-old former prime minister, or a hung parliament in which populist parties – the anti-establishment Five Star Movement and the xenophobic Northern League – would have considerable influence in the creation of a new government.
The exit polls showed Berlusconi’s coalition – which includes the Northern League – winning up to 36% of the vote, a result that could potentially help the billionaire media magnate clinch a fourth election victory under a complicated new Italian election law.
Analysts were also poring over early data that showed a potential political upset: Matteo Salvini, the firebrand head of La Lega – as the League is now known – beating out Berlusconi within the centre-right coalition.
Under a “gentleman’s agreement”, whoever emerges as the winner between the two will choose the next prime minister, if the coalition were to win a majority.
Updated
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