Former Italian premier Silvio Berlusconi casts his ballot in Milan on Sunday. Italy votes in a watershed parliamentary election Sunday and Monday that could shape the future of one of Europe's biggest economies. (Antonio Calanni/AP)

Silvio Berlusconi, the three-time Italian prime minister, billionaire playboy and perpetual criminal defendant who was all but counted out of Italian political life when a debt crisis forced his resignation in 2011, shocked the country Monday by shooting back into a position of influence.

Even by the chaotic standards of Italian politics, the resurgence of Berlusconi’s People of Liberty party, which seems to be in contention to win the most seats in the Italian Senate, along with the astonishingly strong showing of a naysaying protest party led by Beppe
Grillo, a seething ex-comedian opposed to the euro, has cast the Italian government into confusion.

The results have created the remarkable possibility that Italy could find itself next week without a government or a pope.

That instability rippled across the Atlantic. As details of the election became clear through the day, the Dow Jones industrial average dropped more than 200 points, or about 1.5 percent, in a potent reminder of how sensitive markets remain to events in the euro zone. The currency region’s financial crisis has ebbed in recent months, but only on the assumption that political leaders would follow through on promised economic policies — something the Italian results may throw into doubt.

There was no clear victor in the election held Sunday and Monday. There were, however, losers. The left-leaning Democratic Party, led by Pier Luigi Bersani, a mild-mannered former industry minister, appeared likely to barely win the lower house of Parliament, but fell far short of expectations.

Bersani, 61, is weighed down with far-left partners such asNichi Vendola, a gay, ex-communist southern governor that the Italian press once dubbed “the white Obama.” Vendola once assessed himself to The Washington Post as “beloved.” He is less cherished by the potential partners Bersani needs to form a coalition, setting the stage for yet another collapse-prone Italian government.

“We have a problem of governability,” said the party’s spokesman, Roberto Seghetti. The banner headline on Il Messaggero on Tuesday read: “Ungovernability wins.”

The smallest electorate since World War II sent a clear message of dissatisfaction to the country’s caretaker prime minister, Mario Monti, who was advised by David Axelrod, top campaign strategist for President Obama. Monti, an international darling for his technical government’s emphasis on responsibility and personal austerity, proved a political flop at home and won less than 10 percent of the vote, dashing his hopes to finish a mission that counted Obama among its supporters.

Critics of Berlusconi were sure that the onetime cruise ship singer was gone from national politics for good. Berlusconi, whose last public appearances before the election included a favorable comparison between the Sicilian mafia and the Italian judicial system, had promised to forgive the building of illegal houses and personally pay about 4 billion euros worth of property taxes for Italian citizens. He also expertly benefited from the fragmentation of the Italian political universe.

“He’s the best campaigner,” said Roberto D’Alimonte, professor of political science at the Luiss university, who added that the “winner” of the elections, however, was Grillo’s raging Five Star Movement, which garnered about a quarter of the vote. “We have never seen anything like it in Europe,” he said of Grillo’s campaign.

The 64-year-old Grillo, who has sapped the votes of the Italian left, transformed himself from theoretical funnyman to public scourge
of Italy’s corrupt political class
in 2007, when he began holding V-Day protests (short for an Italian expletive). Hundreds of thousands of supporters have turned out in recent weeks to hear Grillo, who has put a mask of notorious plotter Guy Fawkes on his Tsunami Tour’s campaign camper, has the most-read blog in Italy and exhausts himself screaming “Thieves!” and bemoaning the country’s myriad woes.

What worries many of Italy’s more sober politicians and analysts is that the protest leader does not seem to be in favor of much. A conviction for vehicular manslaughter in an accident that killed three people means that Grillo himself cannot serve in Parliament, and his candidates have no governing experience, having won by railing against tax collectors, vaccines, citizenship for children born to Italy’s legal immigrants and the euro.

Outside a voting station on Via Tevere, Enrico Beccarini, 61, said he was disappointed by a Monti campaign that amounted to “putting up posters” and the chilly economist trying to warm his image by adopting a dog named Empathy. He voted for Grillo’s party because “it’s a strong protest vote,” he said.

Giancarlo Pagotto, a retired banker, walked out minutes later and said he had cast his ballot for Berlusconi. “At this moment, he seems to me the only acceptable choice,” he said with a shrug. “I’m anti-communist so I can’t vote Bersani; Grillo is leading a good rebellion, but we have no idea what he’s for, and Monti disappointed me.”

As for Berlusconi’s pledge to personally pay for the country’s real estate tax, Pagotto said, “you say a lot of things in an electoral campaign. My hope is that he wins and then steps aside for someone else in his party and becomes economy minister. He’s a great entrepreneur.”