Italy election wake-up call for euro zone
Italy's political parties are looking for a way forward after an election gave none of them a parliamentary majority.PT2M1S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2f4oo 620 349 February 27, 2013
Italian party chiefs began jockeying to forge a coalition of rivals and head off a second vote as a political vacuum of at least a month loomed, threatening to whipsaw financial markets.
In the aftermath of an inconclusive election, Democratic Party leader Pier Luigi Bersani and resurgent ex-Premier Silvio Berlusconi may be seeking to avoid a ballot that would favor populist Beppe Grillo, whose movement was the top vote-getter in its first national contest. No formal steps can be taken until a new parliament convenes March 15.
‘‘If they don’t change strategy and go vote again with similar candidates, the risk is a Grillo landslide,’’ Giovanni Orsina, a history professor at Luiss Guido Carli University in Rome, said in an interview today.
Former Premier Silvio Berlusconi cast his ballot in Milan, Italy. Photo: AP
Italian bonds and stocks tumbled as the election triggered renewed market concerns over Europe’s debt crisis. Recession- scarred voters repudiated budget rigor and made Grillo, a former comedian, a political force.
In the four-way race, Bersani, the pre-election favorite, won the lower house by less than a half a point. Berlusconi, fighting a tax-fraud conviction and charges of paying a minor for sex, called for a recount and won a blocking minority in the Senate.
‘‘Arrivederci complacency and euro-zone calm,’’ Marc Ostwald, a strategist at Monument Securities Ltd. in London, wrote in an email today.
Poll time ... Beppe Grillo and his wife Parvin Tadjik both cast their votes. Photo: Reuters
Ten-year Italian bonds fell, sending the yield up 33 basis points to a three-month high of 4.83 percent. The FTSE MIB stock index tumbled 4.3 percent at 2.50 pm in Rome.
The bargaining began before the results were final last night. Bersani’s ally Nichi Vendola said talks with Grillo’s movement were ‘‘necessary.’’
Bersani, leader of the Democratic Party, claimed the mandate to form a government. Berlusconi, who conceded in a radio interview earlier today, dismissed new elections as not ‘‘useful.’’
For his part, Grillo has rejected an alliance with anyone.
‘‘They might go on another seven or eight months and produce a disaster, but we will be watching and working to keep it under control,’’ he said in a yesterday in a video on his website.
The election result may lead President Giorgio Napolitano to install an interim government, such as the one headed by incumbent Mario Monti, who scored 10.6 percent, to write a new election law as the prelude to another vote. That would extend the political deadlock through most of 2013.
‘‘The only viable solution to form a government appears to be a repeat of the grand coalition that supported the Monti government, that is, a PD-Monti-Berlusconi alliance,’’ Riccardo Barbieri, chief European economist at Mizuho International Plc in London, said in note today.
‘‘Such a government would probably have a short horizon and focus primarily on the economic priorities and on reforming the political system.’’
Berlusconi said on his Twitter page today that he was ‘‘taking time’’ to consider an alliance with Bersani, while ruling out any coalition that included Monti.
Berlusconi and Grillo, the candidates running to reverse the austerity implemented by Monti to contain the region’s financial crisis, scored about 55 percent of the popular vote.
Bersani’s coalition polled 29.5 percent in the lower house, or Chamber of Deputies, compared with 29.2 percent for Berlusconi’s group and 25.6 percent for Grillo. Bersani and his allies got 31.6 percent of votes in the Senate, compared with 30.7 percent for Berlusconi and 23.79 percent for Grillo, according to final figures from the Interior Ministry.
An Italian government requires a majority in both houses. Current rules make it difficult for a party to win both. In the Chamber of Deputies, the coalition gaining the most votes automatically gets 54 percent of the seats.
The Senate is apportioned regionally, diffusing the bonus-premium effect.
Bersani took 340 seats in the 630-seat lower house. His aides claimed victory and said he should get a chance to form a government. Berlusconi refused to concede.
Bersani had 113 seats in the 315-member Senate, according to the ministry. Berlusconi’s share was 116, with Monti getting 18. Grillo, who ruled himself out as a candidate due to a manslaughter conviction in the 1980s, got 54 seats.
The vote gave Italians their first chance to weigh in on the austerity demanded by European leaders as a remedy for the European sovereign debt crisis.
Bersani ally Enrico Letta said a hung parliament in the third-biggest euro-area economy would challenge the European Union’s embrace of austerity championed by German Chancellor Angela Merkel.
‘‘This possible outcome would have very heavy consequences for Italy at the European level,’’ Letta, deputy head of Bersani’s Democratic Party, said on RAI 3 television.
‘‘Based on these projections, more than half of Italians expressed a vote against austerity, against the euro, against Merkel.’’