Connect to share and comment
Italy was on tenterhooks Thursday to see whether leftist Pier Luigi Bersani had managed against the odds to muster enough support to form a government after inconclusive elections that have left the country vulnerable.
The former Communist, given a mandate last week to try to forge a bloc strong enough to govern the eurozone's third largest economy, was expected to meet President Giorgio Napolitano at around 1700 GMT to say whether he has the parliamentary backing needed to rule.
Should the intense and often bitter consultations over the last six days have paid off, a proposed new Bersani government could then be put to a confidence test in parliament. Otherwise, the mandate could be given to someone else.
"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 appeared that he may be forced to consider a controversial deal to work with the centre-right -- a move he has ruled out so far.
Business leaders and trade unions have sounded the alarm over the state of the economy in Italy, which is suffering its longest recession for 20 years.
-- 'There's no more time to postpone' --
"We cannot wait. We are at the end, there's no more time to postpone, there is no time left to wait and see what happens," Italy business lobby head Giorgio Squinzi said Thursday.
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 Wednesday during talks with the anti-establishment 5-Star Movement (M5S), which he has repeatedly tried -- and failed -- to woo.
The M5S, founded by former comedian Beppe Grillo, has refused once and for all to back Bersani.
While Bersani has said working with former premier Silvio Berlusconi and the right risks embittering centre-left voters, some within his party think allying with their rivals would be better than returning to the ballot box.
"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," the daily La Stampa 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 several key appointments, 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 concern among investors.
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.
As Italy waited with bated breath to learn of Bersani's fate, Grillo threw political players into a spin by suggesting that there was no need at all for a new government because the country's badly needed reforms could be put into place by parliament.
Monti summed up the desire for a quick conclusion to the political stalemate on Wednesday, saying his caretaker government "cannot wait to be relieved of duty".