OH HAPPY day. The Italian election result is a triumph for democracy. “No pope, no government, no police chief,” went a viral tweet on Tuesday, hailing the arrival in Rome of “punk politics”. The outcome is an antidote, not just to Italy’s corrupt politics, but to the dogma of austerity that now has Europe’s economy by the throat. The only way of loosening its grip is through the ballot. Congratulations, Italy.

The most spectacular victor is Beppe Grillo, a rollicking satirist but with a clear message: that austerity, the euro and corruption are jointly to blame for Italy’s ills. We can argue the issues, but why bother when no one listens? When politicians banned Grillo from TV, he turned to the blog and the piazza. His knockout blow was the ballot.

Grillo’s chief victim is the short-lived prime minister, Mario Monti. He was pushed into office by the banks a year ago to impose unlimited suffering on the Italian economy, so as to shore up the euro and thus protect German and other bank loans from devaluation. Darling of the bankers’ ramp, he was Super-Mario.

Like Greece and with no local currency to take the strain, the Italian economy had to be waterboarded. It shrank by at least 2.2 per cent last year, with official unemployment at about 10 per cent. Monti promised to hold the Italian economy in its downward spiral, without growth and ever less able to repay its mounting debt. Future generations would be in perpetual bondage to German banks.

Grillo spoke for those generations. His one roughly coherent policy may be a referendum on the euro, but leaving the euro is the key that unlocks the prison door. Even the revival of the outrageous Silvio Berlusconi is good news: his irresponsibility might contribute to pushing Italy into financial crisis and eventual salvation.

For what seems an entire decade, Europe is to be dominated by the “politics of austerity”, a gamble with the economy of an entire continent on a par with that of the 1920s. Leaders (and their bankers) claim that austerity is a “necessary” punishment, to be visited on European people for allowing their governments to borrow beyond their means. The policy offers no growth to pay off the debts, and for the eurozone no devaluation to reduce their incidence. The message is forget Keynes and take the medicine, even if it is poison.

Despite being outside the euro straitjacket, Britain’s finance minister George Osborne holds that austerity knows no bounds. As he starves the economy of demand and it duly shrinks, his revenue slides - and the debt and deficit rise. There is a classic vicious circle. Sooner or later, austerity becomes an end, not a means: an obsessive self-flagellation. These finance ministers are like Aztec priests at an altar. If the blood sacrifice fails to deliver rain, there must be more blood.

 AUSTERITY NOT WORKING: You can fool a democracy only so long. The current anti-Keynesian dogma has lasted four years and is just not working. In Greece and Spain, unemployment is touching an appalling quarter of the workforce. France is in trouble and, even in Germany, the strain is telling as growth falls.

Europe’s leaders are steadily dragging their joint economies towards depression, afflicting their competitive relation with the outside world possibly for ever. Nor can they blame others. They are doing it to themselves, voluntarily, in obeisance to the gods of confidence, who long ago abandoned them.

Clearly no new idea will dent these dogmatists. Economists are to modern government what doctors were to tobacco companies, as good as the last fee. Change will only come, as Chesterton said, with “a sharp blow to the head” and from a blunt instrument.

That instrument is the ballot. If there is one thing a politician dreads more than a central banker, it is an election. Greece briefly fell last year under the spell of the anti-austerity star, Alexis Tsipras. Holland is fiercely anti-austerity. France saw the anti-austerity left bundle Nicolas Sarkozy out of office. Spanish austerity is at the mercy of maverick separatists. Italy has Grillo, with heaven knows what result.

On Thursday, at the Eastleigh by-election in southern England, the party of Britain’s own Grillo is predicted to shock the coalition government. The Eurosceptic Ukip’s Nigel Farage may come from right of stage, but his appeal is similar to Grillo’s. Conventional politics has gone bureaucratically native. The European tier of government is aloof and the eurozone rigid. One-solution Europe does not fit all. The wildcats have the same cry: follow me to the forum and throw the bastards out.

Italy has long been Britain's favourite foreign country. Even as its two great institutions, the republic and the catholic church, stumble into corruption and immorality, all must be well. This is Italy where even the ungovernable is bella figura. No one believes this will cease.

Yet wildcat populism always terrifies the existing order. In America it is the Tea Party and Occupy. In Scandinavia, Holland, Austria and France, a communist, poujardist or fascist periodically crashes the system. Mosley did it in pre-war Britain. Since then [Enoch] Powellism, nationalism, [anti-Iraq war] Respect, even the odd Liberal has threatened, for a while, to upset the bipartisan apple cart.

It seldom lasts. Italian politics will establish a new equilibrium. If lucky it will be outside the euro and on the way to recovery; if not it will be in lifetime bondage to eurozone bankers. Either way Italy will remember the heady moment of Feb 2013, and so should we.

By arrangement with Guardian