ROME (AP) — Italian voters appeared to reject Silvio Berlusconi's bid for a triumphant comeback, exit polls showed Monday, as a center-left coalition that has suggested it would stay the course of painful economic reforms took the lead in the country's pivotal election.
The Italian election has been one of the most fluid in the last two decades thanks to the emergence of a strong protest party, and was being watched closely by Italy's eurozone partners and international investors.
The decisions Italy's government makes over the next several months promise to have a deep impact on whether Europe can decisively stem its financial crisis. As the eurozone's third largest economy, its problems can rattle market confidence in the whole bloc and analysts have worried it could fall back into old habits.
The Milan stock market rose 2.9 percent after the polls closed and exit polls were published, with the benchmark FTSE MIB hitting 16,704.19 points.
Pier Luigi Bersani's coalition — which has shown a pragmatic streak in supporting tough economic reforms spearheaded by incumbent Premier Mario Monti — was leading in both the Senate and the lower house of Parliament, according to exit polls.
Bersani's coalition has taken 35.5 percent of the vote for the lower house of parliament, ahead of the center-right coalition under Berlusconi with 29 percent, the polls indicated.
The poll by Tecne has a margin of error of plus or minus 2.5 percentage points.
Exit polls for the Senate showed an even stronger result for the center-left, which was showing 37 percent of the vote compared with 31 percent for Berlusconi's forces. Grillo was in third with 16.5 percent and Monti in fourth with 9 percent, Tecne's polls showed.
Bersani's party would have to win both houses to form a stable government, and given the uncertainty of possible alliances, a clear picture of prospects for a new Italian government could take days.
But, the vote appeared to show that Italians both are willing to endure more economic reforms, perhaps at the hands of a center-left that has traditionally looked out for Italian workers and their rights.
The early indications "confirm a positive result for the center-left that is heading toward control of both houses," said Democratic Party member Cesare Damiano on Sky. "Even the markets are betting on this"
Italy's borrowing costs also reflected the optimism that the country will stick to its reform plans. The interest rate on Italy's 10-year bonds, an indicator of investor confidence in a country's ability to manage its debt, fell to 4.19 percent in afternoon trading Monday. Last summer, at the height of concern over Italy's economy, that interest rate was hovering at about 6.36 percent.
Bersani, a former communist, has reform credential as the architect of a series of liberalization reforms and has shown a willingness to join with Monti, if necessary, to form a stable government. But he could be hamstrung by the more left-wing of his party.
A political movement founded by comic-turned-political agitator Beppe Grillo had 19 percent of the vote in the lower house, a show of anger at the political class for bringing the country to the brink of financial disaster and ignoring the needs of the rank-and-file. Monti's centrist coalition had a terrible showing with 9.5 percent, according to Tecne's exit polls.
Turnout was 55 percent when polls closed Monday night, 7 percentage points below the turnout rate in the last national election in 2008 . Experts say a low turnout will hurt the mainstream parties. Usually around 80 percent of the 50 million eligible voters go to the polls.
While Bersani's leading in the lower house has sent a positive signal to the markets, he will have to win control of the Senate — which depends on votes in Italy's regions — to form a stable government, or join forces with another coalition.
Under Italy's complex electoral law, how the upper chamber's seats are divvied up depends largely on how the candidates do in Italy's regions, since the more populous regions, like Lombardy, get a greater share of the seats. Whether the center-left takes Lombardy might well decide if the coalition could stitch together a coalition with a workable majority in the Senate, as well as in the lower Chamber of Deputies, where the regional factor doesn't exist.
Berlusconi, who was forced from office in November 2011 by the debt crisis, has sought to close the gap by promising to reimburse an unpopular tax — a tactic that brought him within a hair's breadth of winning the 2006 election.
Monti, respected abroad for his measures that helped stave off Italy's debt crisis, has widely been blamed for financial suffering caused by austerity cuts.
Grillo's forces are the greatest unknown. His protest movement against the entrenched political class has gained in strength following a series of corporate scandals that only seemed to confirm the worst about Italy's establishment. If his self-styled political "tsunami," which was polling third, sweeps into Parliament with a big chunk of seats, Italy could be in store for a prolonged period of political confusion that would spook the markets. He himself won't hold any office, due to a manslaughter conviction
The vote tally for the Senate was being intensely followed. Under Italy's complex electoral law, how the upper chamber's seats are divvied out depends largely on how the candidates do in Italy's regions, since the more populous regions, like Lombardy, get a greater share of the seats. Whether the center-left takes Lombardy might well decide if the coalition could stitch together a coalition with a workable majority in the Senate, as well as in the lower Chamber of Deputies, where the regional factor doesn't exist.
Most analysts believe Bersani would seek an alliance with center-right Monti to secure a stable government, assuming parties gathered under Monti's centrist banner gain enough votes. While left-leaning Bersani has found much in common with Monti, much of his party's base is considerably further to the left and could rebel.
Barry reported from Milan.