Results are emerging for the Italian upper house (Senate) and it is not a pretty picture. With 301 out of 315 allocated, neither center-right Silvio Berlusconi nor center-left Bersani are able to reach a majority. Monti’s center party hardly received any seats, and Beppe Grillo’s 5 Star Movement gained enough seats to force a new election.
Bersani’s PD gained 104 seats, Berslusconi’s party gained 123, Monti got only 17 and Grillo stormed into the Senate with 57 seats. 158 seats are needed for a coalition. 14 seats are still not assigned.
With the current numbers, this is only possible if Grillo joins the old establishment politicians. He can be the king maker, but this would be against everything he preached for.
Monti was supposed to be the kingmaker, and to go with Bersani. However, Prime Minister Monti will is not longer the king nor a king maker. Even if Monti wins the 14 seats that are still being counted, he cannot even form a majority with Berlusconi, which he replaced in late 2011.
Thanks to Mish for pointing this out. His blog is highly recommended.
And while Berlusconni leads in the upper house, Bersani is expected to win in the lower house. This complex situation will likely lead to fresh elections, perhaps with a change of the electoral law.
Another remote option is that Berlusconi and Bersani will cooperate in a unity government. This is probably impossible.
EUR/USD is now experiencing a “dead cat bounce†above 1.31. See more about the euro’s collapse: EUR/USD Extends Losses; Reaches Lower Support as Italian Counting Continues
Update: EUR/USD resumes its falls and is now printing fresh lows at 1.3078 as the difficult political picture emerges.
Update 2:
- Also USD/JPY crashes on a safe haven trade.
- EUR/JPY returns one month and 600 pips on the Italian political mess
