Good morning all from Rome - as you can see I have opted for the large moka pot this morning. We will all need it! Here are a few thoughts on #Italianelections2018 after an extraordinary night. 
1. There are two ways to look at this #ItalianElection2018. One is the electoral outcome: a badly hung parliament. The other is the political message: an anti-establishment triumph.
2. Let's start with the electoral arithmetics. It's ugly. None of the three blocs (Centre-right, Centre-left, 5 Star Movement) will be able to secure a majority. We will need some form of grand coalition, which, in a way is what we always expected.
There are three options:
1) Centre-right with some support from the centre-left
2) 5 Star Movement with some support from the centre-left
3) 5 Star Movement and the League
At the moment they all look pretty unlikely, but we'll see. #ItalyElection2018
1) Centre-right with some support from the centre-left
2) 5 Star Movement with some support from the centre-left
3) 5 Star Movement and the League
At the moment they all look pretty unlikely, but we'll see. #ItalyElection2018
4. These calculations should not distract us from the main political message of #ItalyElection2018 - this was an anti-establishment triumph, of the same league as the #Brexit or the #Trump upsets, in the eurozone's 3rd largest country.
5. More than half of the voters have backed the Five Star Movement and the League. These parties have been very cautious (to say the least) on the euro, critical of Italy's migration policy, and open to "no vax" ideas.
6. The EU now has a massive issue at its Southern border. Whatever the government, there will be calls for higher spending/lower taxes, which will be impossible to reconcile with the euro zone fiscal rules. What will Germany do?
7. This new political reality will not go away by calling a new election or by some coalition wizardry.The 5 Star Movement has been excluded from power for years, but has kept growing.The League is in a dominant position in the centre-right. Like it or not, this is the new Italy.
8. The League and the 5 Star Movement will be rightly celebrating today. But the hard part starts now. They have triumphed on a fanciful platform of unrealistic promises (flat tax, universal basic income). If they go into government, they are bound to disappoint.
9. What happens when reality starts to bite? Will anti-establishment parties turn against the EU, or will they renege on their promises because leaving the euro is too dangerous? It's far too early to tell, but I guess we are about to find out. #Italianelections2018
10. My thoughts on #ItalyElection2018 are now in this @BV column: A period of great uncertainty lies ahead, for both Italy and the rest of the EU. bloomberg.com/view/articles/…
