Italy Elections 2013: Silvio Berlusconi Likely in Power Position After Muddled Result

Pier Luigi Bersani - P 2013
Vittorio Zunino Celotto/Getty Images

Pier Luigi Bersani - P 2013

The billionaire tycoon finished a close second at the polls, setting up days or weeks of instability as the rest of Europe looks on and worries.

ROME – Italy’s political outlook remained muddled Tuesday, with media tycoon Silvio Berlusconi behind the pre-election favorite Pier Luigi Bersaniby a razor-thin margin, sparking an outcry among European media worried that Italy could spark a new round of debt worries.

With the full election results reported Tuesday afternoon, Bersani led Berlusconi 29.54 percent to 29.18 percent in the lower house of parliament, and 31.63 percent to 30.72 percent in the Senate. Rules will give Bersani a comfortable lead in the lower house, but in the Senate, his 121 seats in the 315-seat chamber will not be enough to hold a majority.

The apparent impasse has sparked concerns across Europe, where the Sueddeutsche Zeitung headlined its coverage, “First the nightmare, then the waking up.” El Pais in Madrid wrote about “doubts about Italy,” while France's Liberation headlined Tuesday’s editions, “Fracture, Italian style.”

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Exit polls late Monday showed a larger lead for Bersani, but analysts said all along that his gaining control of the Senate would be a problem.

What comes next is a period of days or weeks in which Bersani seeks to strike a deal with the forces of Berlusconi in a grand coalition, or perhaps those of comedian-turned-activist Beppe Grillo, whose allies earned 54 seats in the upper chamber. Incumbent Mario Monti, often speculated to be a possible match for Bersani, earned just 18 seats in the Senate -- too few to help boost Bersani to a majority.

"What we have now is a very complicated situation with very few solutions," said Roberto D'Alimonte, a political scientist with Rome's LUISS University.

The news was taken in a negative light across Europe. The Italian Stock Exchange in Milan opened 5 percent lower, with bank stocks leading the sell-off. In other exchanges across Europe, stocks slipped in step with Milan, while the yield on Italian bonds -- a reflection on investor confidence in the country -- rose to their highest levels in three months. The euro lost ground against the dollar.

Even Berlusconi's Mediaset saw its share price drop, falling 5.6 percent in heavy trading Tuesday.

Berlusconi and Grillo both ran on populist platforms, promising to reverse many of the austerity measures put in place by Monti, who raised taxes and slashed government services in order to avoid a debt crisis. Worries that one or both might be able to influence government policy going forward was behind the investor jitters.

If Bersani fails to construct an alliance, it will likely mean a lengthy period under a caretaker government, followed by a new round of elections, perhaps as soon as mid-year.

Unless it’s part of an unlikely alliance with Bersani, there still appears to be little chance that Berlusconi will return to power. But whoever ends up will have to contend with the power of Berlusconi -- and his Mediaset television and cinema empire -- as their main opposition.

Georg Szalai contributed to this report.