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Italy faces political gridlock after crucial elex

February 25, 2013 • Business


Former Premier Silvio Berlusconi casts his ballot in Milan, Italy, Sunday, Feb. 24, 2013. Italy votes in a watershed parliamentary election Sunday and Monday that could shape the future of one of Europe’s biggest economies. (AP Photo/Antonio Calanni)

ROME (AP) — Italy faced political paralysis Monday as near-complete results in crucial national elections showed no clear winner and raised the possibility of a hung parliament. The uncertainty bodes ill for the nation’s efforts to pass the tough reforms it needs to snuff out its economic crisis and prevent a new round of global financial turmoil.

The chaotic election scenes in the eurozone’s third-biggest economy quickly snaked around globe — sending the Dow Jones index plunging more than 200 points in its sharpest drop since November and causing Tokyo’s red-hot benchmark index to sink nearly 2 percent at open.

A major factor in the murky result was the astonishing vote haul of comic-turned-political leader Beppe Grillo, whose 5 Star Movement has capitalized on a wave of voter disgust with the ruling political class.

That has coupled with the surprise return as a political force of billionaire media mogul Silvio Berlusconi, who was driven from the premiership at the end of 2011, to roil the Italian ballot. Berlusconi’s alliance was neck-and-neck with center-left leader Pier Luigi Bersani’s coalition for both Parliament’s lower house and the Senate.

The ballot was so close that final official results were not expected until daytime Tuesday, at earliest.

The decisions Italy’s government makes over the next several months promise to have a deep impact on whether Europe can decisively stem its financial crisis. As the eurozone’s third-largest economy, its problems can rattle market confidence in the whole bloc and analysts have worried it could fall back into old spending habits.

The unfolding uncertainty raised the possibility of new elections in the coming months, the worst possible outcome for markets that are looking to Italy to stay the course with painful but necessary reform.

While Italy’s postwar history has largely Login to read more

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