The polls are open in Italy, as Italians choose a new government in a general election. Results will become known early morning hours, as Forex markets open and trading gets underway in Asia. This election has mainly been characterized internationally as marked by neo-fascist, anti-immigrant sentiment, with an increase in the prospects for radical, “populist” parties – yet the result is still expected to be inconclusive (a “hung parliament”), and lead to no change in government or provide firm direction for Italy. For this reason, unless the result is wildly different from expectations, as the numbers come in there is unlikely to be any unusual market volatility.
Opinion polling is banned by law during the final two weeks before the polling date in Italy. The final polls, which were conducted from 12th the 16th February, suggested about 26% for the center-left parties, 37% for the center-right parties, and 26% for 5-star, a populist party which is Eurosceptic but does not easily fit into conventional left-right definitions. This means that barring a political earthquake, months of haggling will be required to form a government, and it probably won’t be able to do very much anyway.
Most Italians would agree that the country is in bad shape. Unemployment is a shade under 11%, economic growth is well below the Eurozone average, and the Italian economy has still not recovered to its level of output of 10 years ago. Six hundred thousand African migrants landed in Italy over the past year, and although most pass through, the sizeable influx has triggered fear.
The most “likely” surprise could be a better than expected showing by 5-star and the right-wing parties Brothers of Italy and the Northern Leagues, which might make a Eurosceptic alliance more possible. Yet even if that comes to pass, it would be very hard to imagine Italy leaving the Euro, let alone the European Union.