Silvio Berlusconi has staged a remarkable comeback. He may not actually win the Italian election on Feb. 24-25, but he is still capable of destabilizing both Italy’s politics and its markets. The mere prospect, however remote, of “Il Cavaliere” returning to power just as the euro zone is on the way out of an existential crisis will see policymakers in Brussels and Berlin keep fingers firmly crossed over the next few days.
Publishing the results of opinion polls is illegal in Italy for the last 15 days before an election, but that hasn’t stopped Italian political sites running reports about horse races and Vatican conclaves, where the names of the horses or candidates for the papacy bear suspicious allusions to Italian political figures. These not-polls confirm a trend that had begun before the 15-day deadline: After a long period where victory seemed assured, the coalition of center-left political parties led by Pier-Luigi Bersani has seen its lead shrink.
While Berlusconi’s wide range of populist campaign promises—including extensive tax cuts and a €4 billion property tax rebate—have been widely mocked, they have also won over many swing voters. At the same time, the anti-establishment, euro-skeptic and social-media-driven “5 Star Movement,” led by Italy’s most popular internet blogger, Beppe Grillo, has enjoyed a late surge on the back of a series of corporate corruption scandals and widespread disillusion with mainstream political parties.
Berlusconi’s comeback has probably come too late to return his center-right party to government. But strong enough showings for both him and Grillo could potentially prevent Bersani’s center-left from reaching a parliamentary majority even in alliance with the reform-minded centrists who support outgoing prime minister Mario Monti (an independent). Even if these two groups do manage to form a governing coalition, with the wide range of vested interests it will contain it is unlikely to be stable, and will struggle to continue Monti’s program of reforms.
But if he loses, Berlusconi won’t simply disappear into the sunset. Indeed, his allies have already pledged to wage a “guerrilla warfare” campaign from the opposition benches to disrupt and undermine the next government. The equally populist 5 Star Movement will do the same. Don’t be surprised if Italy faces another election 12 to 18 months from now.