Italy's Bersani scrambles to find parliament majority

ROME (AFP) - Italy entered uncharted waters on Saturday as centre-left leader Pier Luigi Bersani scrambled to find a parliamentary majority even though his coalition failed to get enough votes in elections that have left the country in deadlock.

The leftist was given the go-ahead by President Giorgio Napolitano on Friday to try and win over lawmakers from rival parties after his coalition won a majority in the lower house but not in the upper house in last month's vote - a first in Italy's post-war history.

Mr Bersani began his consultations immediately after getting the nod from Mr Napolitano, who asked him to report back "as quickly as possible" and warned that Italy was in a "social and economic crisis" as it endures its longest recession in two decades.

European capitals and financial markets are watching nervously and have pressed for the euro zone's third largest economy to move quickly, particularly after a bailout dispute for Cyprus reignited fears over the euro area debt crisis.

A former school teacher who joined the then-powerful Italian Communist Party as a young man, the 61-year-old Bersani is the son of a car mechanic and is known for his down-to-earth style.

He served in previous centre-left governments and spearheaded an economic liberalisation drive aimed at reviving Italy's anaemic economic growth when he was minister for economic development.

Mr Bersani may try to woo lawmakers from the Five Star Movement, a new protest party that scored a stunning success in the Feb 24-25 polls, winning a quarter of the vote and coming in third after Mr Bersani and Mr Silvio Berlusconi's centre-right.

Mr Napolitano all but excluded the possibility of a "grand coalition" between Mr Bersani and his arch-rival Berlusconi, saying the obstacles to an agreement "appear significant" even though both politicians had signalled a deal might be possible.

The centre-left currently holds 123 senate seats.

It hopes to be able to count on the support of former premier Mario Monti's centrist party, which holds 18 seats - but would still need another 17 to reach the senate majority of 158.

Any government would require a majority in both houses of parliament under the Italian system.

Should Mr Bersani fail, analysts say another scenario would be a technocratic government similar to the outgoing one led by Prime Minister Mario Monti, a former EU commissioner and economics professor.

Such an arrangement would likely be short-lived however, analysts warn, and Italy would be forced to hold repeat elections possibly within months.

76-year-old Berlusconi, a scandal-tainted three-time prime minister embroiled in several court cases, lost to Mr Bersani by a razor-thin margin and will likely be a powerful force in Italian politics whatever government is formed.

Professor James Walston of international relations at Rome's American University warned that with the Cyprus issue reverberating through the euro zone, a return to instability for Italy on the financial markets could prove "catastrophic".

Italy managed to pull back from the debt crisis under Mr Monti, who was brought in at the end of 2011 after Mr Berlusconi was ousted by a parliamentary revolt amid European pressure and a wave of market panic.

But while Mr Monti's austerity reforms and tax hikes reassured European leaders, the economy has failed to pick up and many Italians are suffering.

"European institutions are very concerned, because if there's no government in Italy, all the reforms which Monti put in place will stop," Prof Walston said.

Markets were relatively upbeat after Mr Bersani won the nomination, however, with the Milan stock market closing 0.69 per cent higher on Friday.

The differential between Italian and German 10-year sovereign bond yields - a key indication of investor unease - also narrowed to 313 basis points on Friday from 322 on Thursday.

During his campaign, Mr Bersani promised to stick to the broad course of reforms and budget discipline pursued by Mr Monti but said he would do more to promote jobs, growth and "social equity".

If he does become prime minister, he would face the huge challenge of balancing pressure at home to ease austerity and European insistence for Italy to stick to its economic targets.

Mr Bersani has also responded to the groundswell of protest votes that went to the Five Star Movement, saying he intends to halve the number of lawmakers in parliament and do away with unpopular perks.

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