Schulz urges Italians not to vote for Berlusconi There is concern the emergence of a populist government will derail the nation's austerity program. Mr Mario Monti has failed to make headway in opinion polls, even as former premier Mr Berlusconi and ex-comic Beppe Grillo gained popularity. Pier Luigi Bersani, the union-backed Democratic Party candidate, leads the table. Bersani and Monti have said they will form a coalition if necessary. In an increasingly bitter election campaign, Berlusconi has sought to paint Monti as a Merkel subordinate, following "German-centric" austerity policies ordered by Brussels and Berlin that he says have plunged Italy into recession. Monti in turn has accused the scandal-plagued Berlusconi of damaging Italy's international credibility and has highlighted his own image outside Italy as a guarantor of stability. Azad Zangana, European economist at Schroders, said he expected Bersani to become the next Prime Minister of Italy, and will probably have to join forces with Monti's coalition to take the upper house. "This result should help boost the confidence of investors in Italy's ability to continue along its much needed reforms strategy," he said. Even if the election does not go as smoothly as planned, our view is that volatility in both Italian bond and equity markets represent a buying opportunity. Eimear Daly, head of market analysis at Monex Europe, said the Italian election had the potential to reignite the euro crisis, with Berlusconi campaigning on a policy of reversing reforms and austerity with a pledge to refund a controversial property tax. "[Berlusconi] seems unlikely to be able to win both houses of parliament but he has the ability to paralyse the political system in Italy," she said. This will lead to a protracted election process that will destabilise financial markets and undermine the euro. On Wednesday, Berlusconi was accused of trying to buy votes just days before Italy's general election after sending a letter to millions of households promising to refund a much-hated property tax. The letters were sent out by the billionaire's centre-Right PDL party as Italians prepare to vote on Sunday and Monday, in one of the country's most important elections for years. Mr Berlusconi's political rivals said the letters were misleading because at first glance they looked like official rebate notices from the Italian inland revenue.