The reason that the Italian election is interesting -- and thus the reason I'm going to cover it -- is that we're seeing a country where the government has gotten borrowing costs down, but the real economy is going into the toilet.
For some perspective, here are two slides from Morgan Stanley (out of a recent chartbook) that show the dismal state of the Italian economy.
Basically you've got: Declining GDP, tightening credit standards, a decrease in the capitol stock, and surging unemployment. A real horror show all around.
Morgan Stanley
Morgan Stanley