The Italian electorate has overwhelmingly rejected the austerity which its technocratic government led by Mario Monti with the backing of Germany had imposed on the country. Mr. Monti’s party according to La Repubblicca received a mere 10.5 % of the vote and thereby elected only 45 members of the House. It was a resounding defeat for the austerity camp.The centre left coalition led by Pier Luigi Bersani received 29.5 % of the vote and elected 340 members to the House. The former prime minister Silvio Berlusconi also ran against austerity and his right of centre coalition received 29.1 % of the vote and received 124 seats. The anti politician comedian Beppo Grillo received 25.5 % of the vote and secured 108 seats in the House.Because of the special rules that reward the top party additional seats the Centre Left can control the house but it does not control the Senate . In the Senate the results are tabulated on a regional basis and the Bersani coalition received 31.6 % and 113 seats; Berlusconi 30.7 % and 116 seats; Grillo 23.8 % and 54 seats; Monti 9 % and 18 seats. So because there does not appear to be a stable coalition there may well be new elections in a short period of time. in the meantime, however, the EU’s obsession with austerity has been dramatically and democratically defeated. It is long overdue to rethink the policy and respect the democratic wishes of its people. The markets not surprisingly reacted negatively. But upon reflection they ought to understand that a policy that does not work and lacks democratic backing cannot last and that sustainable growth and recovery is only possible with alternative stimulative policies.