Italy remains without a viable government a fortnight after the national election. Many in the media have treated the result as just another round of the country’s political circus, of interest only because of such bizarre candidates as convicted fraudster Silvio Berlusconi and populist comedian Beppe Grillo.

The result gave Grillo’s Five Star Movement (M5S) a quarter of the vote, coming from nowhere, and has left attempts to form a government in limbo. But it’s not the first time since World War Two that Italy has seen a hung parliament, so why did it send shock waves through European business and government circles?

Italy is Europe’s third largest economy, after Germany and France, and the vote is a firm rejection of the austerity measures dictated by Brussels, Berlin, the IMF and the banks. The former prime minister Mario Monti, the unelected technocrat backed by Brussels to implement the measures over the past year, was comprehensively rejected, with a mere 10% of the vote.

Economists and governments know that austerity only drives faltering economies further into depression, but they’ve come up with no alternative. European Commission president Jose Manuel Barroso has declared that Italy must “stay the course and not give in to populism”, while Eurozone finance ministers, meeting in Brussels last week, appeared to be paralysed.

Democracy Italian style may be deeply flawed, but it has sent a clear message: the working people of Europe will not consent to be pauperized to pay for the banking follies of the politicians.

With unemployment at 12%, Italy is not the worst affected by the crisis (Spain’s unemployment rate is 26%, a staggering six million jobless), but its people are certainly suffering. The Bank of Italy has just published research showing that 65% of households lack sufficient funds to meet their basic needs.

Echoes of Mussolini

So what happens now? Berlusconi’s right-wing bloc got 29% of the vote, the Partito Democratico (former Stalinists and social democrats) barely more. Neither can form a government on their own, and Grillo, an unpredictable demogague, is calling a plague on both their houses. His main slogan Vaffa! which translates as “go fuck yourself” scarcely constitutes a program.

The comedian is no joke. With his anti-authoritarian stance and his contempt for political parties (he refuses to form one himself and prefers to head his own movement) Grillo is drawing comparisons with Mussolini who started on the road to fascism with a similar lack of policy and a radical appeal to disaffected youth.

The 109 lower house and 54 upper house members of M5S – the grillini -are a motley crew, enthused by the popular vote but mostly new to politics. According to the newspaper La Repubblica almost 90% of them have degrees, more than a third are women, and an unspecified but significant number are environmentalists and vegetarians.

In sharp contrast with the fine-dining representatives of the major parties, they have arrived in the capital looking for low-cost accommodation and cheap eats. Seasoned observers of Rome politics are referring to them as the “barbarian invasion”.

Appeal to reason

A group of Italy’s most distinguished intellectuals, including philosophers, art historians and jurists, has now launched an appeal to Grillo and his followers to use their balance-of-power position to insist on fundamental changes to the political system. For the first time in the advanced countries, they say, “a movement of indignati has entered parliament and opened up a real possibility of popular action”.

Key signatories include Remo Bodei, professor of the history of philosophy at UCLA in California, art historian Tomaso Montanari and pioneer journalist Barbara Spinelli.

Their proposals constitute a modern bill of rights, including a ban on conflicts of interest of the Berlusconi type, measures against media monopolisation, strong anti-corruption laws, civil rights not negotiable with the Vatican, equal rights to the best in public education and a European-wide program for growth in place of austerity.

As a program it certainly beats Vaffa! but it remains to be seen how M5S will react.

Meanwhile, in the corridors of Brussels and the cabinet rooms of Paris and Berlin, there’s nervousness in the air. As class compromise comes under the greatest pressure since the 1930s, European parliamentary democracy is beginning to look a little shaky.

Jailed by Mussolini in 1929, the Marxist Antonio Gramsci wrote in his Prison Notebooks: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”

Italy signals the start of a new interregnum in Europe, and the tremors on its stock exchanges and money markets may be just the start of a rash of “morbid symptoms”.