“It would increase uncertainty,” said Mujtaba Rahman, the London-based managing director for Europe at the risk consultancy Eurasia Group. “The markets could be spooked.”
The more likely outcome is a coalition led by a rehabilitated Silvio Berlusconi and his Forza Italia party, following his years of disgrace for tax evasion and reports of sex-filled bacchanals. If Mr. Berlusconi emerges from the wilderness to become an Italian kingmaker, that too could roil Europe, given that he has previously scoffed at European rules limiting deficit spending.
One might expect Italy to be in a more optimistic mood. The economy is expanding, albeit slowly, following a decade of crisis. Companies are tentatively hiring. A slow-motion banking disaster has largely been contained, as growth has limited bad loans while the most rickety institutions have been bailed out and restructured.
Still, more than 32 percent of Italians under 25 remain unemployed, while the overall jobless rate is 11 percent. Even after three years of modest growth, the Italian economy remains slightly smaller than it was in early 2004, after accounting for rising prices.
“The general perception is actually very gloomy,” said Nicola Borri, a finance professor at Luiss, a university in Rome. “The recession was particularly bad. A lot of people lost their jobs. A lot of people lost their savings.”
Young Italians see the political class as having failed to refashion an ossified economy in which the elite maintain beach houses, fancy cars and extravagant wardrobes, while everyone else grapples with stagnation. They denounce the still-cozy world of banking in which insiders steer money to politically connected firms while would-be entrepreneurs struggle to secure capital.
They also resent paying taxes to finance comfortable pensions, certain that such funds will be exhausted when they reach their senior years given Italy’s monumental public debt.