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Clock ticks down on Bersani's bid to govern Italy

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(Globalpost/GlobalPost)

Time was running out for Italy's leftist leader Pier Luigi Bersani on Thursday as he wound up days of political talks aimed at mustering the support needed to form a government after inconclusive elections that have left Italy vulnerable.

The former Communist, asked by Italy's president last week to try to forge a block strong enough to govern the eurozone's third largest economy, will report to members of his Democratic Party (PD) after intense and often bitter consultations.

He is then expected to meet President Giorgio Napolitano on Thursday or Friday to say whether or not he has the parliamentary backing to rule.

A proposed new Bersani government could then be put to a confidence test in parliament or the mandate could be given to a different figure.

"Bersani is hanging by a thread," said Stefano Folli, a political analyst and columnist for Italy's Il Sole 24 Ore business daily.

"The markets have begun to realise in the past few days how weak and fragile this Italy without a government is," he said.

Bersani has tried to persuade other parties to support him, proposing a limited programme of urgent reforms in exchange for their backing.

On Thursday, it looked as if he may be forced to consider a controversial deal to work with the centre-right -- a move he has ruled out so far.

Frustration over his apparent inability to make headway and rising concern over the effect a political deadlock may have on debt-laden Italy both appeared to be taking their toll on Bersani as he rushed to explore last minute deals.

Business leaders and trade unions have sounded the alarm over the state of the economy in Italy, suffering its longest recession for 20 years.

Youth unemployment was at almost 39 percent in January, while the economy is forecast to shrink by 1.3 percent this year.

"Only a mentally ill person could have an itching desire to govern right now," Bersani said on Wednesday during talks with the anti-establishment 5-Star movement, which he has repeatedly tried -- and failed -- to woo.

The 5-Star, founded by ex-comedian Beppe Grillo, has refused once and for all to back Bersani and ruled out his chances of luring away key votes from within the movement.

While Bersani has said working with former premier Silvio Berlusconi and the right risks embittering centre-left voters, there are those within his party who think allying with their rivals would be better than returning to the ballots.

"Out of the Beppe Grillo frying pan and into Silvio Berlusconi's fire. The last minutes are ticking on the countdown to Bersani's fall," La Stampa daily said Thursday.

Scandal-hit Berlusconi's People of Freedom party (PDL) has courted Bersani, offering him the chance to form a coalition government in exchange for a say in the appointment in several key roles, to ensure its influence in parliament.

Berlusconi's right-hand man and party secretary Angelo Alfano said Wednesday that "Bersani now finds himself in the blind alley he has closed himself in. It is up to him now to turn the situation around, if he wants to and is able."

Whoever comes to power is unlikely to last more than a few months or a year at most before the country goes back to the polls, analysts say.

"Bersani is left with only one possible ally: Silvio Berlusconi's right-wing," analysts at HSBC bank said in a note, adding that "markets would welcome the news" of a left-right coalition "with relief, as stability would be ensured."

The difference or spread between the German and Italian sovereign 10-year bond yields widened to 477 basis points from around 450 last week, indicating increased investor concern.

Should Bersani fail to strike a deal, Napolitano may hand over the reins to a technocrat government similar to the one headed up by outgoing Prime Minister Mario Monti, who was brought in to rescue Italy from the debt crisis in 2011.

Monti summed up the desire for a quick conclusion to the political stalemate on Wednesday, saying his government -- which has stayed on in a caretaker capacity after February's inconclusive election, "cannot wait to be relieved of duty".

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http://www.globalpost.com/dispatch/news/afp/130328/clock-ticks-down-bersanis-bid-govern-italy