Italy’s voters surprised and frightened governments and financial markets across Europe with their repudiation of austerity and much of the Italian political establishment.

Europe’s fears of an ungovernable Italy and renewed euro-zone crisis may prove justified. With no party holding a majority in the new Parliament, there is little chance for renegotiating the economic straitjacket demanded by European lenders or enacting needed reforms.

For decades, the political establishment, regardless of party, has failed to deal with Italy’s well-known problems — excessive bureaucracy, official corruption, organized crime, unequal and regressive taxes and anemic economic growth. The past 15 months of growth-crushing austerity policies under Prime Minister Mario Monti have mainly added to the pain. Italy’s borrowing costs declined (at least until the election returns came in). But recession has deepened, unemployment has risen and living standards have fallen back to the levels of the 1980s. Mr. Monti’s popularity never recovered from the deeply regressive tax he imposed on family homes.

A protest vote driven by public anger is not so surprising. The big losers were centrist supporters of Mr. Monti, who came in a dismal fourth, and the center-left Democratic Party, led by Pier Luigi Bersani, which won only a slim plurality in the lower house and ran a disappointing second in the regionally apportioned Senate. These two blocs were expected to form a coalition government with policies not very different from Mr. Monti’s. That would have pleased Europe, but is now impossible.