By Stefano de OliveiraNo clear winner has emerged from Italy’s recent election. Negotiations will now take place over the next few weeks to form a governing ‘super-coalition’ or face new elections in a matter of months. However, Sunday night’s results have given many Italians dissatisfied with the current political establishment reason to rejoice, and their opponents to fear what comes next. The biggest story of Sunday night’s elections was the historic breakout performance of Luigi Di Maio’s 5-Star Movement, an anti-establishment, Eurosceptic party founded in 2013 by comedian Beppe Grillo, who will become the single largest political party in Parliament, receiving more than 30% of the vote in both houses of Parliament. A centre-right alliance including Forza Italia, the party of the former prime minister Silvio Berlusconi, and Lega Nord, headed by Matteo Salvini, the anti-immigration and anti-Euro hardliner, emerged as the largest bloc with a predicted vote share of around 37% in the lower house and around 38% in the Senate. However, they will likely fall short of the 40% threshold required to form a government and thus will have to reach out to other parties to be able to govern as a majority. However, Lega Nord has also emerged as the primary political party within the centre-right alliance, surpassing Berlusconi’s Forza Italia and representing yet another blow to Italian establishment politics. This has raised the idea of the formation of a joint 5SM-Lega Nord coalition, possibly able to break the majority threshold in both houses and presenting a broad Eurosceptic and anti-establishment platform. Such an alliance is considered to be unlikely but still fathomable. Sunday’s elections also exposed the collapse of the centre-left coalition and its biggest party, the Partito Democratico, headed by former prime minister Matteo Renzi who resigned from office in 2016 following the failure of his party’s constitutional reform referendum. With the party failing to break 20% in either the upper or lower house, and its only significant coalition partner, +Europa, similarly failing to break 3%, it is almost certain that they will form Italy’s political opposition, barring a doubtful partnership with either the centre-right or 5SM. Unsurprisingly, the rise of 5SM and Lega Nord, along with other populist parties, has left both the EU and its Italian supporters concerned over the future membership status of the Republic. Several prominent figures in both 5SM and Lega Nord have toyed with the idea of establishing a parallel currency to counter the Euro, or simply scrapping the monetary unit altogether, although Di Maio was quick to remove such ideas from his platform, while Lega Nord’s Salvini has openly supported an Italian exit from the union altogether. Nonetheless, financial markets are reacting negatively to the results, and the Euro has currently fallen below 1.23 against the dollar upon the news. While a populist coalition is far from certain, and the outcome of the upcoming negotiations is unknown, this uncertainty and the possibility of a Euroskeptic government in power in the EU’s fourth-largest economy is sure to have negative consequences for the future of the union and the value of its currency. As long as this uncertainty reigns, we can be certain that Italian stability will continue to be shaken.Sources:https://www.dailyfx.com/eur-usdhttps://apnews.com/a0bde9c0d8e149958f48e03aaf927076/Election-projections-point-to-euroskeptic-shift-in-Italyhttps://www.reuters.com/article/us-global-forex/euro-holds-breath-on-italy-draws-support-from-german-deal-idUSKBN1GG16Hhttp://www.repubblica.it/speciali/politica/elezioni2018/2018/03/04/news/risultati_elezioni_politiche_pd_centrodestra_m5s_fi_lega-190424815/http://www.repubblica.it/speciali/politica/elezioni2018/2018/03/04/news/elezioni_politiche_m5s_noi_pilastro_della_legislatura_rosato_pd_noi_all_opposizione_romani_centrodestra_comunqu-190432427/ (Picture sourced from this article)