PD secretary

Photo: Joe Weisenthal, Business Insider

Rome, Italy — We’re live from the Casa dell’Architettura in Rome, where the centre-left Partito Democratico is hosting its election day activities.Over 7 hours after the polls have closed, things have turned to chaos.

Markets around the world are plunging, as we have seen a split vote.

The markets were hoping for the liberal leader Pier Luigi Bersani to win easily, allowing him to form a coalition government with technocrat leader Mario Monti.

This would have paved the way for more unpopular austerity and reforms that the rest of Europe has been very happy to see.

But the voters had a different idea tonight.

As Emmanueal Letta — the second in command of the left party — just explained to a packed room of reporters, the voters have engaged in a “rebellion” and the country appears to be ungovernable.

That rebellion is a huge share of the vote for Berlusconi and Beppe Grillo, the populist comedian.

That rebellions represents a big stick in the eye to the EU, Brussels, Angela Merkel, and everyone else who was happy about Italy’s reform path.

It does appear that the left has won (very narrowly) the lower house of Parliament, but thanks to a quirk in the voting, Silvio Berlusconi’s party will deny the left a majority in the Senate.

The government will likely be hung, and there’s talk of another election in a matter of weaks or months.

All this news has caused markets to quake. US stocks tanked. Fear has surged. The Euro has fallen. Gold spiked. And the Japanese yen had a gigantic day.

How this shakes out over the coming days will be critical, and markets will be on a knife’s edge over the return of European political risk.

Here’s a look at the scene inside Berseni election night HQ, a place that was expected to be a victory centre, but where Bersani never showed up.

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