Italy needs 'miracle government': Bersani

Italian leftist leader Pier Luigi Bersani said Monday that the recession-hit country was in a "dramatic situation" and needed "a government which performs miracles".

The warning came as Bersani raced to try and build the necessary support to govern after February elections that left the country in political gridlock, amid pressure from the centre-right.

"The truth is that there is a dramatic situation... We need a government which performs miracles," he said after consultations with trade unions which precede talks with political parties on Tuesday.

The former Communist and head of the Democratic Party (PD) was given the official go-ahead on Friday to begin consultations and is seeking to establish a minority government reliant on votes from other parties in parliament.

The centre-left -- which won a majority in the lower house but not in the upper house at last month's vote, leaving it scrambling for support -- has so far ruled out allying with the centre-right, led by scandal-hit former premier Silvio Berlusconi.

Berlusconi's People of Freedom party (PDL) and allies came a close second in the election and are insisting that Bersani accept the idea of a "grand coalition" or the country must return to the vote.

"The line is absolutely clear. We ask two things: either the Democratic Party does an about turn... and shows openness to a government with the People of Freedom party... or (we) go straight back to the vote," Berlusconi said in a telephone interview on his own Canale 6 television.

"The election results showed two (political) forces which are essentially equal. It is wrong to waste time like this, because the economic situation in Italy is tragic. We need a solid government," said Berlusconi, a three-time former premier who is involved in several court cases.

The 76-year-old suggested Monday that his party would back Bersani at the head of a centre-left and right coalition if Berlusconi's second-in-command Angelo Alfano was made deputy prime minister.

Any deal between Bersani and Berlusconi would anger supporters on the left and risk dividing the PD.

The party is already split between those supporting Bersani's government bid and others who blame him for losing the large lead the left had over the right in the run-up to the February vote.

Trade union leaders have called on Bersani to form a government "at all costs" and avoid a return to the polls which would slow down the adoption and implementation of key reforms they insist are needed to relieve pressure on ordinary citizens, from tax cuts to the reduction of political costs.

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

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

Official preliminary figures this month showed the country's unemployment rate shot up to 11.7 percent -- the highest level since at least 1992 -- while 38.7 percent of young people were without jobs.

Any new government will have to face the huge challenge of compromising between pressure at home to ease austerity, and European insistence for Italy to stick to its economic targets.