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Italy’s Byzantine election laws could mean many different outcomes. The worst result would be no party or coalition being able to form a government, leading to new elections.

Another possibility could be a parliament so divided that it can’t govern effectively, or a shaky coalition of parties with clashing agendas – meaning that any policies would be the result of endless compromise and back-room deals. A badly split parliament “would surely affect investors’ confidence as Italy’s political future would remain unclear,” said Aul and Ashley.

The return of a government led by Berlusconi’s center-right coalition – regarded as unlikely – could also dismay markets given his call to repeal Monti’s home tax and the lack of confidence markets showed in him in 2011.

Q: What do markets want to see?

Analysts say investors seem to be anticipating that the center-left Democratic Party, led by Pier Luigi Bersani will win. Bersani opposes budget austerity but is regarded as not totally against all efforts to improve conditions for business. Markets would like it best if he wins but still needs the seats won by small parties led by Monti to govern. That would mean the government might continue with some of the reforms.

Q: So should we expect market chaos and the eurozone crisis to erupt again?

A: Not right away, no. Italian law requires extensive consultation, so it could take weeks to tell who is in charge. In 2008, it took 24 days for Berlusconi to be sworn in despite a landslide win. However, an anti-reform result could mean Italy’s borrowing costs could rise in the days and weeks following the election. That would be a sure sign that bond investors are more skeptical of the country’s long-term ability to pay. Economists Aul and Ashley warn: “Whichever party ends up in power… needs to focus upon Italy’s economic frailties as a matter of priority.”