He may have been ousted from office, prosecuted for fraud, corruption and having sex with an underage prostitute but he’s back! Italian media magnate and former Prime Minister Silvio Berlusconi is seeking re-election at the polls this weekend.

Perhaps even more surprising:  He could conceivably win high office again.

“It’s still unlikely but it’s not impossible any more,” says Vincenzo Scarpetta of the Open Europe think tank. “Berlusconi has made a remarkable political comeback. He has been able to gain ground in the opinion polls, largely thanks to his anti-austerity campaign.”

Berlusconi has promised to reduce some of the taxes imposed by the previous government; he’s even pledged to refund the hated property tax paid by many homeowners late last year. And he refuses to accept the need for radical reform to shake-up Italy’s inflexible labor market. His message is proving popular with many Italians at a time when there is widespread weariness with budget cuts and falling living standards.

Franco Pavoncello of John Cabot University in Rome says Italians  are undoubtedly suffering:

“GDP’s going down. It’s negative. Unemployment is growing constantly. Shops are closing left and right. You know the country is on its knees,” says Professor Pavoncello.

But if Berlusconi wins the election, Italy’s plight might worsen:

“It would put the frighteners on the markets and all the European institutions. And it would cause major problems for Italy and the European Union” says James Walston of the American University in Rome.

If Italy abandons austerity and reform, markets may drive up its borrowing costs again. The eurozone debt crisis — now dormant — could be rudely reawakened. Victory for a coalition of pro-reform parties seems more likely than a Berlusconi win, but markets won’t fully relax until the results are in.