Who are the main parties running in the Italian election?
There are four main groups: first, the centre-Left Democrat Party; second, the centre-right Freedom Party (i.e. Berlusconi); third, a list which supports Mario Monti, the current Prime Minister, composed of various smallish parties; and fourth, a movement led by the anti-party populist comedian Beppe Grillo. In addition there are parties to the left of the Democrat Party, and to the right of Berlusconi, and one or two other smallish ones. The significance of the small parties lies mainly in how many votes each takes away from the larger ones. 

What impact on Europe will the election have?
A win for the centre-left will mean a new ally for the French Socialist government, though Bersani is likely to be more cautious than François Hollande, since the markets are still sensitive to any weakness in Italy’s debt-reduction programme and any further weakness in its growth prospects.

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Europe needs Italy to start growing again, but Italy can only do that when Europe does so as well. The more confident markets become that Italy can find a stable government, the better chance that the government can take growth-stimulating measures without causing renewed financial market turmoil. 

What are the polls saying?
Polls indicate that in the lower house, the Democrat Party will win the largest share of the vote. Under the bonus system operating for the Chamber, that will guarantee a workable majority as long as the centre-left holds together in the face of the tough choices that will be needed. When the centre-left won in 1996 and 2006, it quickly splintered. In any case, Italy operates co-equal bi-cameralism. The government needs a majority in the Senate too. There, the bonus system operates regionally, not nationwide. So there’s no guarantee anyone wins a majority. Currently, the Democrats appear likely to be the largest group in the Senate, but will struggle to obtain a workable majority. The Freedom Party will probably be second. 

What does Europe want?
The financial markets, most EU governments, and Italian business would like Monti to stay on as prime minister. That will be difficult after a bruising election campaign in which, to win votes away from Berlusconi and allies, Monti also has to keep his distance from the Democrat Party.

If the Democrats are influenced, as they may be, by parties to their left, and if the campaign has been bitter, a deal between Monti and the Democrats could be almost as difficult. This would apply whether Monti became Prime Minister, or Democrat leader Bersani took the top spot, as Bersani should if he has a majority in the lower house and a plurality in the upper one. A stalemate, requiring a renewed ambivalent grand coalition under Monti or someone else, would unsettle the returning confidence financial markets are beginning to show in Italy.

Does it really matter to the UK who wins?
It matters a great deal to the UK that Italy has a stable government, that financial markets continue to recover their confidence, and that the eurozone grows. The UK’s economic destiny is tied to the wider EU, whether the UK is in or out of the eurozone, or indeed whether in or out of the EU itself. If the EU economy suffers, the UK suffers. Political stalemate in Italy remains a big downside risk for the EU economy and therefore a risk for the UK.