Italy politics still stuck as Bersani to face president

ROME Wed Mar 27, 2013 4:51pm EDT

Five-Star Movement leader and comedian Beppe Grillo gestures during a rally in Turin February 16, 2013. REUTERS/Giorgio Perottino

Five-Star Movement leader and comedian Beppe Grillo gestures during a rally in Turin February 16, 2013.

Credit: Reuters/Giorgio Perottino

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ROME (Reuters) - Italian center-left leader Pier Luigi Bersani was left on Wednesday with only slim hope of forming a government after talks with rival party leaders ended with rejection from Beppe Grillo's 5-Star Movement.

Bersani said he would report back to President Giorgio Napolitano on Thursday and called on all parties to "accept their responsibilities" and allow a government to be formed.

A February election resulted in deadlock and without an agreement between the parties Italy might have to head back to the polls, adding to the uncertainty in the euro zone as it battles to contain the crisis in Cyprus.

But there was little sign of movement from the other parties, with Silvio Berlusconi's People of Freedom (PDL), saying Bersani had maneuvered himself into a "blind alley" by continuing to seek support from the anti-establishment 5-Star Movement.

"The question is closed, and it is Bersani who has closed it and now finds himself in a blind alley," said PDL national secretary Angelino Alfano.

"It's up to him to turn the situation around, if he wants to, in the interests of the country."

In last month's election, Bersani's alliance won a majority in the lower house of parliament but not in the Senate, leaving it unable to govern on its own.

He has ruled out joining forces with Berlusconi's center-right alliance, the second largest force in parliament, which says a coalition of the two main political forces is the only way to give Italy a government.

The rebuff by 5-Star was expected as the group has always said it will not back the parties it blames for Italy's social and economic crisis.

NO CREDIBILITY

"There are no conditions that would allow us to give a confidence vote to a government made up of these parties because they have no credibility," 5-Star's Senate leader Vito Crimi said after meeting Bersani.

Adding insult to injury, 5-Star's founder, the fiery ex-comic Grillo, posted an entry on his blog calling mainstream politicians including Berlusconi and Bersani "old whoremongers ... who gaily take the piss every day with their daily appeals for governability".

Bersani had hoped to gain support from 5-Star for a limited platform of institutional and economic reforms and he said Grillo's party would have to justify its refusal to support a government in parliament. However Grillo's comments appear to have ended any prospect of an accord.

Some parliamentarians still held out hopes of some form of deal with the center-right that would allow the election of a new president acceptable to Berlusconi's bloc to succeed Napolitano, whose term ends in May.

Bersani played down talk of any such deal.

"It hasn't been put to me in those terms. You can't speculate about any deal over the government and the office of president of the Republic," he said.

The main marker of investor confidence, the spread between Italian 10-year bonds and their safer German counterparts, has widened this week.

"Risks for Italian debt remain very high in the coming weeks," said Annalisa Piazza, a market economist with Newedge in London.

"Although Bersani's consultations with other political leaders might lead to a grand-coalition government, markets are aware that such a government will not last long," she said.

If he cannot reach an agreement, Napolitano may appoint a respected outsider to try to form a technocrat government or a broad cross-party coalition. If that fails, Italy faces the prospect of a return to the polls, possibly within months.

(Additional reporting by Paolo Biondi and Gavin Jones; Editing by Toby Chopra and Robin Pomeroy)

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