Bumpy ride ahead for Italy after indecisive election

Pier Luigi Bersani rubs his forehead (26 February 2013) Pier Luigi Bersani has enough votes to dominate the Chamber of Deputies, but not the Senate

Italy faces difficult choices over the next few weeks and a tough reality for the next six months or more.

In two weeks' time, the new parliament will assemble and will elect its new officers so there is already jostling over who should have the prestige and power of the speakers' jobs.

Formal negotiations for the new government will not start until then, but the informal bargaining has already begun with the leaders marking territory and putting out feelers.

Without the Senate majority he needs to govern, Pier Luigi Bersani, the leader of the centre-left Democratic Party (PD), will have to come to a deal with either Silvio Berlusconi's centre-right People of Freedom (PdL) movement or Beppe Grillo's Five-Star Movement (M5S).

There seem to be three alternatives for Mr Bersani - one difficult and two almost impossible.

Divisions

A grand coalition including Mr Bersani, Mr Berlusconi and the outgoing Prime Minister, Mario Monti, would have the numbers and, indeed, was just the combination that governed Italy from November 2011 until now.

But the bruising electoral campaign, combined with serious personal and ideological divisions, mean that a repeat performance is highly unlikely.

Above all, Mr Bersani's policies are likely to clash with Mr Berlusconi's agenda.

Mr Bersani has promised a serious conflict-of-interest law and a revision of last year's toothless anti-corruption law.

He would also maintain much of Mr Monti's austerity package.

Mr Berlusconi would be unhappy with all of these measures.

Even though he has been making some overtures towards Mr Bersani, they are more for show than substance.

All the leaders are trying hard at the moment to seem "reasonable" and "open to compromise" because none of them wants to be seen to be responsible for preventing the formation of a government and the likely fiscal chaos that would follow.

Fragile arrangement

The second unlikely scenario is a stable minority government.

Mr Bersani could probably persuade the centre-right or Mr Grillo to abstain at the vote of confidence and so allow him to form a government, but then he would have to navigate between the two of them in order to pass each and every measure.

Beppe Grillo speaks to reporters in Genoa (25 February 2013) Beppe Grillo's Five-Star Movement is now the largest faction in the lower house

The only hope that such a fragile arrangement might last is if the external pressures from the markets, the European Union and the European Central Bank are enough to dissuade Mr Grillo or Mr Berlusconi from bringing the government down.

The most likely outcome of the next month's negotiations is a government led by Mr Bersani, or possibly a semi-political/semi-technocrat prime minister like Giuliano Amato, which would have a checklist of policies and an expiry date on it.

Whoever leads this hypothetical government would have to draw up a list of tasks, starting with the election of the new president of the Republic and moving on to election reform, parliamentary reform and other measures which Mr Grillo might support, like conflicts of interest, corruption and cutting the costs of politics.

New president

Mr Bersani has already started making overtures to Mr Grillo, both on the measures they might work on together and on positions.

There has already been a suggestion that a "Grillino" might become speaker of the Chamber of Deputies, even that it might be Marta Grande, at 25 the youngest deputy. (This would echo 1994, when a surging populist movement - the Northern League - made 31-year-old Irene Pivetti speaker.)

Agreement on some reforms is not impossible and Mr Grillo has already tempered his rabble-rousing mode towards a pragmatic political stance.

He says he will represent the Five-Star Movement in the government formation negotiations that President Giorgio Napolitano will manage as soon as the new parliamentarians have taken their seats.

The first deadline is the election of Mr Napolitano's successor - and a deal on the future president is very much part of the negotiation process.

Mr Grillo could agree with Mr Bersani to change the electoral law but it would not be easy to decide on what sort of reform.

The other reforms - conflict of interest, corruption and cutting political costs - are much more controversial and so more likely to be blocked by a Berlusconi-led opposition.

Campaign shortcomings

This means that the new government is likely to have a very short life. It may not be able to do much more than elect a new president whose first job would be to dissolve parliament and call elections at the earliest in July, but much more likely in the autumn or perhaps spring.

Silvio Berlusconi votes in Milan (24 February 2013) All the leaders are trying hard to seem "reasonable" and "open to compromise"

The longer the uncertainty goes on, the more likely is some sort of debt crisis which will inevitably colour the next campaign.

The result is unlikely to repeat this week's, as all the leaders will try to make up for their shortcomings in the last campaign.

For better or worse, Mr Berlusconi will have most of his pending court cases settled; Mr Bersani will be flanked or replaced by Matteo Renzi, the young mayor of Florence who wants a Blairite renewal of the Democratic Party; Mr Grillo will have had a short spell in or close to power; and Mr Monti will have to decide whether to carry on in politics.

It will be a bumpy ride for all of them and the rest of Italy.

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