Italy election wake-up call for euro zone

The euro zone has been largely free of its debt crisis so far this year.

But the Italian election has changed that.

After all the domestic votes were counted Pier Luigi Bersani's centre-left party was neck and neck with Silvio Berlusconi's coalition.

Crucially, a protest movement led by comedian Beppe Grillo polled equally well while the current Prime Minister trailed with just 10%.

There was no majority in the Senate either and control of both houses is needed to govern.

Global markets tumbled on the uncertainty and the mood wasn't much better on the streets of Rome.

(SOUNDBITE) (Italian) RESIDENT, ANGELO, SAYING:

"This is just not governable. This government cannot govern."

(SOUNDBITE) (Italian) RESIDENT, VALERIA GIORDANA, SAYING:

"The 5-Star Movement is really anti-European and he got a lot of votes - that's worrying."

European leaders have been trying to distance themselves from the deadlock but they recognise the need for an Italian government that takes reform seriously.

French finance minister Pierre Moscovici.

(SOUNDBITE) (English) FRENCH FINANCE MINISTER PIERRE MOSCOVICI SAYING:

"We must respect what people choose and what's the democratic system in each of our countries. But what I hope is that Italy will find a solid, a stable and reformist government. And I hope that Mr Bersani will be capable to do so."

Attention has also turned to neighboring Spain.

Both countries are struggling to create growth and control debt.

But Spain's economy minister insisted the election hadn't changed anything for his government.

(SOUNDBITE) (English) SPANISH ECONOMY MINISTER LUIS DE GUINDOS SAYING:

"We are exactly in the same situation and again I think we should not pay too much attention to short-term volatility. I think that at the end of the day what we have to regard is the medium-term scenario."

The political stalemate is similar to that seen in Greece last year.

And - like Greece - fresh elections within a year are now a strong possibility in Italy.

After the repercussions of this election the protest vote next time may not be so strong

But many are wondering about the damage a possible revived debt crisis could do in the meantime.