Italy risks political crisis as MPS bank scandal turns 'explosive' What makes the case so delicate are the bank's close ties to the Italian political Left. Right-wing critics claim it was a patronage machine for the Democratic Party (PD) of Luigi Bersani, current front-runner in Italy's close-fought elections. MPS is 35pc-owned by a foundation that answers to the PD-controlled Tuscan province of Siena and was run by ex-Communist Giuseppe Mussari until his abrupt exit this month. The debacle has led Italian news bulletins and is sapping support for Mr Bersani and ex-premier Mario Monti, the two pro-EU candidates committed to austerity and the EU reform agenda. Comedian Beppe Grillo, scourge of the banking elites, is running at 18pc in the polls on an anti-European monetary union (EMU) ticket. The scandal has revived the hopes of former premier Silvio Berlusconi, struggling until now to make headway with populist attacks on the EU and daily fulminations against Germany, laced with warm words for Fascist dictator Benito Mussolini . Mr Berlusconi's Party of Liberties (PdL) and its Northern League allies are running at 26pc in the polls. There is a growing likelihood of a split result in the elections, with the anti-EU Right gaining enough seats to block legislation. Any slippage on reform would call into question the European Central Bank's pledge to back-stop Italian bonds, endangering fragile confidence in Club Med debt markets. "The Italian elections are a major cause for worry," said Athanasios Orphanides, a former European Central Bank governor and now at MITs Sloan School of Management. The eurozone is not out of the woods yet. People don't seem to fully realise that the economy is in a much weaker state than a year ago and unemployment dynamics are getting worse. All it would take is an event that triggers uncertainty again and there could be a fresh crisis. The scandal has drawn in the ECB's president Mario Draghi, who was head of the Bank of Italy and in charge of oversight when regulators failed to pick up the warning signs at MPS. Daily newspaper Corriere Della Sera has obtained documents showing that the Italian central bank knew about trouble in 2010 and sent two missions to go through the books, but then played down the affair. Italian magistrates in Trani have opened a parallel investigation into the conduct of the Bank of Italy itself. Mr Draghi has held closed-door meetings in Italy over recent days to calm waters, but the scandal is a gift to those in Germany opposed to a full EMU banking union under ECB control. This could seriously damage Mr Draghi's credibility. If he did not know what was going on at MPS, they will say he is hardly the ideal man to take over eurozone bank supervision," said Stephen Lewis from Monument Securities. The Berlusconi-controlled newspaper Il Giornale is relishing its moment of revenge on the Left, writing that the MPS scandal had exposed the hypocrisy of Tuscany's high-minded elites. "The supposed moral superiority of that world is collapsing as the investigation closes in," it said.