Bloomberg View: What Berlusconi's Return Means for Europe

The return of Silvio Berlusconi to the Italian political stage sends an unmistakable message to Europe’s leaders: They’ll have to be a lot more ambitious if they want to hold their currency union together.

In parliamentary elections, Italian voters handed Berlusconi just enough power to make forming a stable government extremely difficult. In doing so, voters soundly rejected the technocratic policies of outgoing Prime Minister Mario Monti, whose efforts to raise taxes, cut pensions, and curb budget deficits helped bring the government back from the brink of insolvency. One in four Italians further rebuffed Monti’s austerity diet by voting for a comedian. Stock markets plunged, and the yield on Italy’s 10-year bond rose to 4.9 percent, its highest level since November.