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Italy faces gridlock after election

– Italy faced political paralysis Monday as near-complete results in crucial national elections showed no clear winner and raised the possibility of a hung parliament. The uncertainty bodes ill for the nation’s efforts to pass the tough reforms it needs to snuff out its economic crisis and prevent a new round of global financial turmoil.

The chaotic election scenes in the eurozone’s third-biggest economy quickly snaked around globe – sending the Dow Jones index plunging more than 200 points in its sharpest drop since November and causing Tokyo’s red-hot benchmark index to sink nearly 2 percent at open.

A major factor in the murky result was the astonishing vote haul of comic-turned-political leader Beppe Grillo, whose 5 Star Movement has capitalized on a wave of voter disgust with the ruling political class.

That has coupled with the surprise return as a political force of billionaire media mogul Silvio Berlusconi, who was driven from the premiership at the end of 2011, to roil the Italian ballot. Berlusconi’s alliance was neck-and-neck with center-left leader Pier Luigi Bersani’s coalition for both Parliament’s lower house and the Senate.

The decisions that 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, it has problems that can rattle market confidence in the whole bloc, and analysts have worried it could fall back into old spending habits.

While Italy’s postwar history has largely been one of revolving-door governments, it has never seen a hung parliament. Experts said that’s likely to change now.

“This has never happened before,” said James Walston, a political science professor at American University of Rome. He predicted such a swirl of political chaos that new elections may need to be called as soon as the new legislature chooses the nation’s next president this spring.

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