UPDATE 3-Protest votes increase uncertainty in Italy election

Mon Feb 25, 2013 5:09am EST

Related Topics

* Polling stations close at 1400 GMT, when exit polls published

* 5-Star Movement of comic Grillo shakes up race

* Sharply lower turnout adds to uncertainty

* Centre-left leading in opinion polls but Senate race open

By James Mackenzie and Gavin Jones

ROME, Feb 25 (Reuters) - Italians voted for a second and final day in a general election on Monday with a surge in protest votes increasing the risk of an unstable outcome that could undermine Europe's efforts to end its three-year debt crisis.

Opinion polls give the centre-left coalition led by former Industry Minister Pier Luigi Bersani a narrow lead but the race has been thrown wide open by the prospect of protest votes against austerity and corporate and political scandals.

"I'm sick of the scandals and the stealing," said Paolo Gentile, a 49-year-old Rome lawyer who said he had voted for the 5-Star Movement, an anti-establishment protest group set to make a huge impact at its first general election.

"We need some young, new people in parliament, not the old parties that are totally discredited," he said.

Most of the voters interviewed outside polling stations by Reuters on Sunday and Monday expected the next government would quickly collapse, thwarting efforts to end an economic crisis.

"I'm very pessimistic, I don't think that whoever wins will last long or be able to solve the problems of this country," said Cristiano Reale, a 43 year-old salesman in Palermo, Sicily. He said he would vote for the far left Civil Revolution group.

A bitter campaign, fought largely over economic issues, has been closely watched by financial markets, nervous about the return of the kind of debt crisis that took the whole euro zone close to disaster and brought technocrat prime minister Mario Monti to office in 2011.

Italy is the third largest economy in the 17-member bloc and the prospect of political stalemate could cause dangerous market instability.

ANTI-EURO FORCES

"There are similarities between the Italian elections and last year's ones in Greece, in that pro-euro parties are losing ground in favour of populist forces," said Mizuho chief economist Riccardo Barbieri.

"An angry and confused public opinion does not see the benefits of fiscal austerity and does not trust established political parties."

Voting ends at 3 p.m. (1400 GMT), with the first exit polls due shortly afterwards. Projections based on the vote count will be issued through the afternoon and the final result should be known late on Monday or early Tuesday.

An extremely close Senate race is expected in several battleground regions and this could delay the final result.

Italian markets were sanguine on Monday morning, with both stocks and bonds showing little change.

Many analysts believe that whatever the result, the next government will be forced to stick to Italy's fiscal commitments because of the fear of a sudden spike in borrowing costs if markets take fright.

The election result is likely to be the most fragmented in decades, with the old left-right division disrupted by the rise of 5-Star, led by fiery Genoese comic Beppe Grillo, and by Monti's decision to run at the head of a centrist bloc.

"It will be a vote of protest, maybe of revolt," said Corriere della Sera, Italy's largest newspaper, on Monday.

It noted that for the first time the winning coalition is unlikely to get more than a third of the votes, making it harder to govern and likely opening weeks of complicated negotiations.

It is unclear how Grillo's rise will influence the result, with some pollsters saying it increases the chances of a clear win for the centre-left, led by Bersani's Democratic Party (PD), because 5-Star is taking votes mainly from Berlusconi.

After the first day of voting on Sunday, about 54 percent of voters had cast their ballots, a sharp fall on the level of 62.5 percent seen at the same stage in the last election in 2008.

If the trend continues on Monday it will confirm the disillusion of voters with a discredited political class.

Bad weather, including heavy snow in some areas, is also thought to have hampered the turnout in Italy's first post-war election to be held in winter.

This could favour the centre-left, whose voters tend to be more committed than those on the right, which has strong support among older people.

"Given the lower turnout, people are betting on a victory of the centre-left," said a Milan trader.

CALL TO ARMS

The 5-Star Movement, backed by a frustrated younger generation increasingly shut out of full-time jobs, could challenge former premier Silvio Berlusconi's People of Freedom (PDL) party as Italy's second largest political force.

"Come on, it isn't over yet," was Monday's front page headline in Il Giornale daily, owned by Berlusconi's brother, a call to arms to get out the vote.

The 76-year-old Berlusconi, has pledged sweeping tax cuts and echoed Grillo's attacks on Monti, Germany and the euro in an extraordinary media blitz that has halved the lead of the centre-left since the start of the year.

Support for Monti's centrist coalition meanwhile has faded after he led a lacklustre campaign and he appears set to trail well behind the main parties.

Monti helped save Italy from a mounting debt crisis when he replaced a discredited Berlusconi in November 2011, but with the economy in its longest recession for 20 years analysts fear an electoral stalemate could delay vital moves to stimulate growth.

"I voted for the PD because a PD win is the only way to have a stable government and we need stability or we will end up like Greece," said Viola Rossi, an 80 year-old pensioner from Rome.

After drawing hundreds of thousands of supporters to its final campaign rally on Friday, Grillo has said he fears voting fraud to try to block a massive breakthrough, telling his supporters to wet the lead in the pencils they use to vote to prevent the crosses being rubbed out.

Whatever government emerges will inherit an economy that has been stagnant for much of the past two decades and problems ranging from record youth unemployment to a dysfunctional justice system and a bloated public sector.

If Bersani wins, it is far from clear that he will be able to control both houses of parliament and form a stable government capable of lasting a full five-year term.

Italy's electoral laws guarantee a strong majority in the lower house to the party or coalition that wins the biggest share of the overall national vote.

However the Senate, elected on a region-by-region basis, is more complicated and the result could turn on a handful of regions where results are too close to call, including Lombardy in the rich industrial north and the southern island of Sicily.

Many politicians and analysts believe Bersani and Monti will end up in an alliance after the vote, despite a number of spiky exchanges during the campaign and Monti's insistence that he will not join forces with Bersani's leftist allies.

As well as the national election, voters are also casting their ballots to elect new regional administrations in Lombardy, Lazio and Molise.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video