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Italy's Bersani seeks way out of vote impasse

Italian PD (Democratic Party) leader Pier Luigi Bersani leaves at the end of a news conference in Rome February 26, 2013. REUTERS/Tony Genti
Italian PD (Democratic Party) leader Pier Luigi Bersani leaves at the end of a news conference in Rome February 26, 2013. REUTERS/Tony Genti

By James Mackenzie

ROME (Reuters) - Italian center-left leader Pier Luigi Bersani rallied his party on Wednesday behind a plan to form a minority government backed by populist Beppe Grillo after failing to secure victory in last week's election.

Bersani, whose coalition threw away a 10-point lead in the opinion polls before the February 24-25 vote, won control of the lower house but let slip a workable parliamentary majority by failing to win the Senate.

The result has left no group able to form a government on its own and Italy facing weeks of uncertainty. A new election could be called within months if no accord can be reached between the divided parties.

Underlining pressure on politicians to agree on a government to tackle the problems of one of the world's biggest sovereign debtors, credit rating agency DBRS cut Italy's debt grade to A (low) from A on Wednesday, citing political uncertainty and a prolonged recession.

Moody's Investor Service has warned the vote was bad for Italy's credit rating while Standard & Poor's has said its rating could be affected in the future. All major agencies rate Italy's outlook as negative.

In an address to officials of his Democratic Party in Rome, Bersani, a 61-year-old former industry minister, acknowledged that the result was a defeat but said the left was the only political force capable of forming a government.

"We are ready, if called on, to propose a government of change based on a core program," he said. "Its purpose will be to open the way forward for parliament."

BIG WINNER

Bersani outlined an eight point platform to be brought before parliament, ranging from stimulating growth in Italy's economy to cutting bureaucracy and cracking down on corruption.

He ruled out any accord with center-right leader Silvio Berlusconi, whose scandal-tainted government fell at the height of the euro zone debt crisis in 2011, saying a deal with the 76-year-old media billionaire would not be "credible or feasible".

Behind his refusal to ally with Berlusconi lies an uncertain calculation which leaves Bersani dependent on the unpredictable Grillo, whose rebel 5-Star Movement was the big winner in the election with more than 25 percent of the vote.

Bersani said it was up to the ex-comic and blogger, who has ruled out both formal alliances and backing for any government in a confidence vote, to show whether he was prepared to act responsibly.

"Someone who obtained 8 million votes and who chose to go into parliament, not remain outside it, has to say what he wants to do for Italy with these votes," he said.

Parliament sits for the first time on March 15, after which President Giorgio Napolitano is expected to begin formal consultations with party leaders on March 19 to assess whether a government can be formed.

Without a vote of confidence, no government can function, so it is unclear how Bersani could form even a minority administration unless Grillo reverses his refusal to give formal assent.

At a separate meeting on Wednesday, outgoing Prime Minister Mario Monti cast doubt on Grillo's reliability as a partner, saying he had shown no sign of engaging with the need for serious economic reform and a commitment to Europe.

"These are problems which the 5-Star Movement does not appear even remotely to be capable of dealing with," he said.

Democratic Party officials approved Bersani's program with only one abstention but he is under growing pressure over the election setback, with 38-year-old Florence Mayor Matteo Renzi seen as the most likely successor in the longer term.

MONTI MEETING

Bersani has been widely criticized for the center left's uninspired campaign, which failed to match either Berlusconi's political flair or Grillo's ability to tap into public anger at the waste and corruption in much of the political system.

Renzi has pledged his loyalty to Bersani, who beat him in last year's center-left primary to choose an election candidate, but he said on Tuesday he would stand again in the future. He left Wednesday's meeting early without speaking.

Late on Wednesday Monti said the idea of his centrist group forming an alliance with the mayor to contest a future election was an "interesting question", according to Italian news agency Agi, adding he would work with current leaders for the time being.

Monti, who has asked for meetings with the leaders of all the major parties, also met Renzi on Tuesday.

The PD's leader in the lower house Dario Franceschini noted in his address to the party meeting that if votes for Monti had been included in the center-left alliance, they would have won a clear majority in both houses.

Although Grillo has ruled out supporting Bersani in a confidence vote, the center left's program contains many points which could win support from the 5-Star Movement, which rode a wave of anger against the austerity policies imposed by Monti's technocrat government.

Bersani proposed moving away from "the cage of austerity" and said he would lead a "correction to European stability policies" which had created a level of hardship that was putting the future of democracy at risk.

He also promised a range of policies to help those hit by Italy's longest recession in 20 years, as well as tough anti-corruption measures and an attack on bureaucracy and waste in the bloated political system.

(Additional reporting by Steve Scherer; Editing by Alison Williams)

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