The Italian election 2018 resulted in a hung parliament as the centre-right and centre-left coalition alongside the 5 Star Movement failed to secure an overall majority to form a government.
But global financial economist Peter Dixon warned it could take “weeks” for political powers in Italy to reach an agreement on how to best deliver a stable government.
Mr Dixon said: “We kind of already knew that it was going to be an indeterminate outcome. What will happen now, what will determine the path of the euro particularly with regards to Italian event development, will be what kind of government finally comes out of this.
“That could be weeks away.”
Determined Italians waited in long queues at polling booths on Sunday to vote in an election that could change history in Europe amid a growing populist movement in the bloc.
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But Mr Dixon added that the weeks of instability will ultimately be of minor concern for the European Union despite the country resoundingly supporting anti-EU forces.
Speaking to Bloomberg, he continued: “We’re kind of used to uncertainty in elections generally. Something we got used to over the course of the past couple of years anyway and particularly in regards to Italy.
“Markets are thinking ‘well, we got other things to worry about. We got Trump, we got trade tariffs.’ Italy is actually way down the worry list for the European Union right now.”
Italy has long been considered a threat to European stability because of the insecurity of its banks, on which the country’s political disharmony has a substantially bad impact.
Populist Lega leader Matteo Salvini – dubbed the “Italian Farage” – promised to fight Brussels to make sure “Italians come first”
During his election campaign, he threatened to withdraw Italy’s funds from the bloc and even trigger an “Italexit” if his demands for Italy are not met.
Focusing his electoral campaign on fighting illegal immigration and protecting Italy from the EU’s “unfair” financial laws, Mr Salvini has often criticised both Eurocrats’ calls for greater integration and the euro, which he blasted was “a German currency”.
The EU Commission has not yet commented on the electoral results in Italy because they are not yet final, the spokesman of President Jean Claude Juncker said.
“The markets have nothing to fear,” League leader Matteo Salvini told reporters in Milan, hours after the anti-establishment 5-Star Movement also claimed the right to govern as the biggest single party.
Shares, bonds and the euro all weakened on prospects of an administration led by eurosceptic parties promising to ramp up spending.
The League’s economics chief on Monday raised the prospect of a ruling alliance with 5-Star, which would likely be euro-sceptic and be little interested in further European integration.