Italians Vote in Election Watched by Wall Street

Former Italian Prime Minister Silvio Berlusconi casts his vote in a polling station on February 24, 2013 in Milan, Italy.
Pierre Marco Tacca | Getty Images
Former Italian Prime Minister Silvio Berlusconi casts his vote in a polling station on February 24, 2013 in Milan, Italy.

Three topless women caused several moments of chaos in Milan on Sunday, as former Prime Minister Silvio Berlusconi voted (presumably for himself) in the Italian general elections.

As Berlusconi walked into the polling station, they removed their shirts revealing the words "Basta Silvio" painted in black on their breasts and backs. They repeatedly screamed "Basta Berlusconi," even as police tackled them and dragged them outside of the polling station.

"Basta Berlusconi" is Italian for "Enough of Berlusconi." Silivo Berlusconi has been prime minister of Italy three times, and he's making another go at it in this election, despite facing allegations of paying for sex with an underage belly dancer, and fighting a conviction for tax evasion.

The chaotic event seemed fitting for an election that also includes a comedian with a conviction for manslaughter.

(Read More: Protest Vote in Italy Could Throw Up Big Surprise)

Despite the circus-like nature of the campaign, Italians at polling stations today were in extremely serious moods, with many telling CNBC this is one of the most important elections in the country's history.

One voter told CNBC the country is in a "dangerous" place and needs strong leadership. Another said it was time for "revolution" and "new" leadership.

Lines were steady and consistent at the polling stations visited by CNBC's news-gathering crew.

Italians face a large number of choices on their ballot—two dozen or more depending on the region. But Wall Street anticipates, and hopes, that the center-left, pro-European "Democratic Party" will take the lead, as predicted by the polls. A mainstream party lead by Luigi Bersani, it has the backing of the country's powerful unions.

However, the PD, as its called, is unlikely to garner enough votes to control the senate. Pollsters and Wall Streeters predict it will form a coalition with Prime Minister Mario Monti's Civic Choice party.

While a pro-union party may not seem to be a typical desire of Wall Street, analysts believe the outcome would be the most stable leading to a government that would last the longest. Additionally, the PD is supportive of many of the reforms that economists believe Italy needs in order to resume a path to economic growth.

But in just the last few days, the optimal scenario has come into question. Rumors of secret polls are swirling, suggesting that Monti's support may be eroding even further from the roughly 14% he controlled when the last legal polls were published in early February. (Italian law prohibits the publishing of polls this close to the election.)

(Read More: Silvio Berlusconi's 'Greatest' Hits)

Leaked polls, according to press reports, showed Monti losing ground to Giuseppe "Beppe" Grillo's "Five-Star Movement." A classic throw-the-bums-out movement, the Five-Star party's rallies have gathered tens of thousands of attendees. Grillo has a conviction for manslaughter from a 1980 car accident in which 3 people died.

An inconclusive election, or "hung parliament," which Citi estimates at only a 7% probability, could be problematic and lead to instability in the markets.

Italy is the 3rd most indebted country in the world after the US and Japan. It's mired in a deep recession, with unemployment above 10%. If the country doesn't begin to grow at a steady enough pace, its tax receipts will fail to be enough to pay back the money it owes to investors around the world.

In the past, when investors grew nervous, they began abandoning the country's debt, pushing the country's interest rates to 7% and above—a level some analysts believe is unsustainable. In the past, rising Italian interest rates has lead to sell-offs in markets around the world including the United States.

So the choices Italians make in this election aren't just relevant to them, but to investors around the world.

(Read More: Italy's Election: Tycoon, Clown or Professor)

—By CNBC's Michelle Caruso-Cabrera; Follow her on Twitter: @MCaruso_Cabrera