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Italians sick of 'politics as usual' facing deadlock

26/02/2013

Spread jumps more than 50 points on renewed debt worries

Italians sick of 'politics as usual' facing deadlock

Rome, February 26 - Italy faces the risk of being mired in political gridlock after Sunday and Monday's general election failed to produce a clear winner. Pier Luigi Bersani's centre left won outright control of the House, even though it only had 124,407 votes more (0.36%) than Silvio Berlusconi's centre right, thanks to the allocation of bonus seats that goes to the winning alliance. But it had only 119 seats in the Senate, with a handful of seats still to be assigned on Tuesday, compared to 117 for the centre right. Both blocs were distant from the magic number of 158 needed to have a working majority in the upper house, in part because comedian Beppe Grillo's anti-establishment Five Star Movement (M5S) sent shock waves through the system by making huge gains. To add to the confusion, Berlusconi's People of Freedom (PdL) party called for the seats in the House not to be allocated until the results had been checked because the difference between the centre left and centre right was "too close to call". Both the centre left and the centre right said they were not in favour of returning to the polls in the near future in order to get a clear winner. Berlusconi was open to the hypothesis of working with Bersani - which Bersani later rejected - but he ruled out striking a deal with the reform ticket of outgoing Premier Mario Monti. "I don't think it's useful in this situation (to vote again)," Berlusconi told one of his Mediaset TV channels. "Now we have to reflect for the good of Italy. Someone is going to have to do with making some sacrifices, but Italy deserves to be governed". Although Berlusconi did not have enough seats to form a government for the fourth time, his supporters have heralded the result, as his coalition was trailing by double figures in the polls at the start of the campaign. The centre left, which had been leading in the the polls throughout the campaign, was stunned by the outcome. Center-left leader Bersani said the results showed Italians had rejected "politics as usual" and had refused to accept "inefficient institutions and politics that seem to have lost moral credibility". His assessment came at a press conference where he conceded that his coalition did not win the general election despite topping the popular vote in both houses. The centre left won 340 seats on the House with 29.54% of the vote there, while the centre right took 124, despite being just behind with 29.18% of the votes. The only real victors were the M5S, which claimed 25.55% of the votes for the House, more than any other individual party, and winning 108 seats. Grillo's Internet-based movement, which won 54 seats in the Senate, tapped into public disenchantment with the established parties caused in part by a series of corruption scandals and by the political class's failure to address the country's economic ills. "We have become the biggest party in three years (since the movement was founded) without (public) money, without ever having accepted a single (electoral expense) reimbursement," Grillo said via Twitter on Tuesday. Monti, who took the helm of an emergency technocrat government after Berlusconi was forced to resign in November 2011 because Italy's debt crisis was threatening to spiral out of control, registered only 10.56% of the vote in the House. This won his alliance 45 seats there. It took 9.13% in the Senate, only just above the 8%-entry threshold, winning 18 seats. Nevertheless, he said he was happy. "Some people hypothesized a result that was slightly better, but I am very satisfied," said former European commissioner, who stressed that his Civic Choice movement was established less than two months ago. He added that his party's share of the vote was all the more important as the election produced an inconclusive result. Meanwhile international leaders, who are anxious to see how the fallout of the elections in the eurozone's third-largest economy will impact the global economic crisis, expressed their faith in the Italian political system. EU Commissioner for Economic Affairs Olli Rehn expressed his confidence in the capacity of President Giorgio Napolitano to find a solution to the uncertainty of no clear parliamentary majority. "Italians have made their democratic choice, now there is a complex scenario but we have faith in the institutions and in the ability of President Napolitano to find a rapid solution that might enable Italy to tackle the challenges ahead," he said. "The (EU) Commission will work in close collaboration with the country to support it in this challenge". German Chancellor Angela Merkel said "Italy will find its way" out of its election impasse. She added that the election did not voice widespread voter anger against EU-dictated austerity policies applied by outgoing Premier Monti. "A reasonable savings policy is the prerequisite for growth," she said. But Guy Verhofstadt, leader of the Lib Dem group in the European parliament, was less certain. "The European Union also has its share of responsibility because it failed to answer Mario Monti's repeated calls for help in lowering interest rates on public debt," he said. Useful responses might have been the creation of a redemption fund or the partial sharing of the debt across the eurozone, the former Belgian premier said. "Instead the only thing Monti got from his colleagues was a pat on the back". Verhofstadt added that European leaders needed to "learn the lesson" resulting from the Italian elections, referring to gains by populist forces led by Berlusconi and Grillo, who together won more than half of the popular vote. "Fiscal discipline is absolutely necessary, but by itself it is not sufficient to combat the crisis," he said. "The incorporation of austerity measures with solidarity and policies for growth is not a choice but a duty". On Tuesday the spread between Italian 10-year bonds and the benchmark German bund - a key indicator of investor confidence in Italy's ability to weather the euro crisis - jumped more than 50 points on renewed debt worries.