Italian President Giorgio Napolitano, two months shy of his 88th birthday, has said his work is done as he prepares to hand off the country’s political stalemate to an unknown successor. The role of the Italian president is generally a figurehead — cutting ribbons, greeting dignitaries, that kind of thing — except in times of political crisis, of which Napolitano has had plenty.

The former communist and resistance fighter managed to muscle Silvio Berlusconi from power in November 2011, when Italy’s bond yields topped 7 percent, and pass the baton to Mario Monti, who proved to be beloved by investors and eurocrats. Unfortunately for the two men, Monti didn’t fare as well with Italian voters when he became a political candidate in the Feb. 24-25 elections, and his effort contributed to causing a hung parliament that’s left Italy without a new government six weeks after the vote.

Napolitano’s term ends on May 15, and he said on April 12 that with the presentation of a report he commissioned on possible economic and political reforms, his work was finished. Now the same political leaders who haven’t been able to reach a deal on forming a government, must come to an agreement on Napolitano’s successor, who will then be called on to end the political stalemate. The vote to choose the new president should begin in Parliament on April 18.

Democratic Party head Pier Luigi Bersani, who won a Pyrrhic victory in the February election, has so far refused Silvio Berlusconi’s offer to cut a deal on a president and then form a “grand coalition” government, raising concern that Italy may have to return to the polls. Without changing the election law, a new vote would likely produce a similar divide in the Senate. Still, polls indicate the Berlusconi, despite facing two corruption verdicts, including one for allegedly engaging a minor in prostitution, would likely carry the Chamber.

Original post is Napolitano Says Basta, to Leave Italian Impasse to Successor by Euro Crisis.

The Italian elections were his to lose, and Democratic Party leader Pier Luigi Bersani did a really good job of almost doing just that.

Bersani, a former communist who backed Prime Minister Mario Monti’s technical government, squandered a 15-point poll lead to squeak ahead of Silvio Berlusconi by less than half a point, or 129,000 votes out of more than 35 million cast.

To be fair, Bersani’s dismal effort to win over voters was only partially undone by Berlusconi’s strong campaign. He fell short due mostly to the vote turning into a four-way race rather than a head-to-head contest with Berlusconi.

The Five-Star movement of comic-turned-politician Beppe Grillo, contesting its first national election, emerged as the country’s most-voted single party with 25.6 percent, as Grillo’s anti-austerity diatribes resonated with a huge chunk of Italy’s recession-weary voters. Monti, even though his coalition’s showing was an anaemic 10.6 percent, may have also taken votes from Bersani.

So Bersani’s coalition won the race with just 29.5 percent of the vote, down from the 37.6 percent the Democratic Party and its allies earned in 2008, when it lost to Berlusconi by 9 points. Berlusconi’s bloc won 29.2 percent this time, down almost 20 points from its 2008 victory level.

Still, under Italy’s election law known as the Porcellum, or pigsty in Latin, Bersani gets a bonus premium in the Chamber of Deputies and is automatically handed 54 percent of the seats in the lower house. His problem lies in the Senate, where the premiums are doled out in a series of regional contests, making a national majority elusive. Bersani, even if he teams up again with Monti, is nowhere near a majority in the upper house, and Grillo’s stated goal is to destroy the ruling parties rather than collaborate with them.

So, far from producing a government that could continue or at least maintain the reforms implemented by Monti, which helped narrow the difference between country’s borrowing costs and Germany’s by more than half, the vote has made Italy appear ungovernable. It has raised the prospects of another election this year, where Grillo could be a contender for the top prize.

Markets, which greeted the tumultuous campaign with a yawn, seem to have woken up to the possibility of a prolonged period of political unrest in Italy. The gap compared with German borrowing costs widened by 40 basis points to the highest in more than two months.

Original post is Italy’s Vote Was Bersani’s to Lose, and He Almost Pulled It Off by Euro Crisis.

Pope Benedict XVI’s surprise resignation and the popular San Remo music festival may have clipped some of former Prime Minister Silvio Berlusconi’s momentum in the campaign for Italy’s end-of-month election amid a blackout on opinion polls.

Pope Benedict’s Feb. 11 announcement that he would become the first pontiff in almost 600 years to call it quits has blown the election campaign off the front pages and has dominated television news programs since.

Berlusconi’s prime-time presence also suffered when the Sanremo festival opened on Feb. 13, coinciding with a series of evening news conferences being held by the main political parties. Berlusconi ended up skipping his conference and sending an underling along instead, well aware of what the clash meant: Sanremo drew 42.8 percent of viewers compared with the 1.4 percent who chose to watch the former Berlusconi Cabinet minister talk.

The saturation coverage of the Pope is hurting Berlusconi as well as former comic-turned politician Beppe Grillo, the most media savvy of the candidates, said pollster Renato Mannheimer. “Every day they miss a front page in newspapers and audience on TV, some votes are lost,” he said.

Prior to the Feb. 9 blackout on opinion polls, Berlusconi was on the march. One survey on Feb. 6 put him within its four-point margin of error behind the leader. The five final polls on Feb. 8 showed him trailing front-runner Pier Luigi Bersani by an average 6 percentage points, less than half the lag of a month earlier.

Berlusconi did manage to capture some headlines on Feb. 14 when he defended bribery in a television interview, saying it was pure masochism for Italy’s biggest companies such as Finmeccanica, Eni or Enel to eschew paying bribes to win contracts. Top officials at both defense contractor Finmeccanica and oil company Eni are currently embroiled in bribery scandals.

“Bribes are a phenomenon that exists and it’s useless to deny the existence of these necessary situations,” Berlusconi, 76, said. “These are not crimes. We’re talking about paying a commission to someone in that country. Why? Because those are the rules in that country.”

Given the poll blackout, which aims to prevent voters from being influenced by opinion surveys in the final two weeks of the campaign, Italians won’t be able to gauge the impact of the Pope and San Remo until the exit polls come out after voting ends at 3pm on Feb. 25.

Original post is Pope, Music Festival May Have Clipped Berlusconi’s Poll Momentum by Euro Crisis.

Photograph by Claudio Villa/Getty Images

Striker Mario Balotelli of football club AC Milan

Former Prime Minister Silvio Berlusconi has cut the lead of front-runner Pier Luigi Bersani to 5 percentage points in the countdown to Italian parliamentary elections Feb. 24-25. Berlusconi is tapping into public anger over a banking scandal at Banca Monte dei Paschi di Siena SpA (BMPS:IM) and soaking up the popular adulation over the signing of striker Mario Balotelli to Berlusconi’s Milan soccer team.

Berlusconi’s bloc gained to 27.8 percent, picking up 1.1 percentage points in a week, acccording to an SWG poll released Feb. 1. Bersani’s forces slipped 1.6 points to 32.8 percent. The three-time premier has cut Bersani’s lead in half in a month and he may soon be entering in the margin-of-error territory. The jump in the polls is reviving memories of 2006, when he trailed by about 5 points going into the elections, only to lose by a 10th of a percent.

Revelations that Banca Monte Paschi hid details of structured finance deals that may produce hundreds of millions of euros in losses is embroiling everyone from Italian Prime Minister Mario Monti to European Central Bank President Mario Draghi, while providing fodder for Berlusconi to slam his rivals in attacks that are fueling his comeback.

Berlusconi also got a bounce from Milan signing Balotelli, the 22-year-old striker who scored 20 goals this season for Manchester City and was a hero in Italy’s run to the finals of the European Championship. The 20 million pounds that Milan reportedly paid for Balotelli will seem like chump change to the billionaire Berlusconi if he pulls off an election upset. Berlusconi got some quick dividends when Balotelli scored two goals in his first game to lead Milan to victory over Udinese. Roberto Weber, chairman of pollster SWG, said last week the signing probably added about 0.3 percentage point to Berlusconi’s support in the week.

The three-time premier’s jump in the polls didn’t seem to be hurt by his comments on Holocaust Remembrance Day last weekend, when he praised Fascists dictator Benito Mussolini for “doing a lot of good things.” The remarks prompted headlines and condemnation from around the world, but his supporters seem to have taken it in stride.

Original post is Berlusconi Rides Monte Paschi Scandal, Balotelli Signing to Surge by Euro Crisis.

Revelations that Banca Monte Paschi hid details of structured finance deals that may produce hundreds of millions of euros in losses is embroiling everyone from Italian Prime Minister Mario Monti to European Central Bank President Mario Draghi, while providing fodder for Silvio Berlusconi to slam his rivals in attacks that are fueling his comeback in the polls ahead of elections on Feb. 24-25.

The acknowledgement by the bank last month that former management hid documents from the Bank of Italy — at the time headed by Draghi — that may have shed light on the murky deals brought back shades of Parmalat. The Italian dairy company caused Europe’s biggest bankruptcy in 2003 after it concealed a 14 billion-euro shortfall from investors.

Berlusconi and his allies have seized on the Paschi revelations to attack Monti, whose government is due to extend a 3.9 billion-euro rescue to the bank this month, as well as front-runner Democratic Party Pier Luigi Bersani for his local party’s ties to Monte Paschi.

Berlusconi’s camp has linked the Paschi aid plan to a reviled property tax imposed by Monti, saying the government is taxing homes to bailout the banks. The three-time premier also refers to Paschi as the Democratic Party’s bank, because the local chapter holds sway over the banking foundation that is Paschi’s biggest shareholder and the driving force behind the lender.

While the revenue from Monti’s property tax has nothing to do with loans to Monte Paschi, the association seems to be working for Berlusconi, according to the first polls released since the case exploded last week –even though Monte Paschi will initially pay taxpayers 9 percent possibly rising to 15 percent over the life of the loans.

Berlusconi’s bloc gained slightly in an Ipsos poll released Jan. 29 to 26.8 percent from 26.5 percent a week earlier, while his rivals lost ground by a bigger margin: Bersani’s forces slipped by almost a point to 37.6 percent from 38.5 percent and Monti’s bloc dropped to 15.4 percent from 16 percent. In an EMG poll released the previous day, support for Berlusconi’s People of Liberty Party rose one percentage point to 20 percent, the highest level of the campaign, as Bersani’s lead narrowed to 8.8 percentage points.

Original post is Monte Paschi Provides Fodder for Berlusconi Attacks on Rivals by Euro Crisis.

Former Prime Minister Silvio Berlusconi’s media blitz is paying off, with his center-right coalition closing the gap with Italy’s Democratic Party ahead of Feb. 24-25 election.

The three-time premier, who has always been as much showman as statesmen, has done 54 radio and television interviews since Christmas Eve, spending more than 28 hours gabbing on the airwaves, according to a study published today by newspaper La Stampa. Add another 34 hours of news coverage and Italians have been treated to almost three full days of Berlusconi in less than a month.

Support for Berlusconi rose to 27.2 percent from 25.9 percent at the end of December, with backing for the Democratic Party and its coalition allies slipping to 33 percent from 35.5 percent. That left the Democrats lead at less than 6 percentage points, down from 9.6 in December.

In a mix of softball interviews on programs aired by his Mediaset network and mano-a-manos with more aggressive reporters, Berlusconi has lambasted the policies of Mario
Monti’s government, even though he sustained it in power for a year. He’s also shirked any responsibility for the state of the economy in Italy, a country he governed for eight of the past 11 years, excluding his year in the current government.

Monti’s austerity policies may have restored Italy’s international standing after the Bunga-Bunga days of Berlusconi and slashed the yield spread with Germany by about half, still, the deepening recession has soured many Italians on the former economics professor. Monti and his allies had about 16 percent support in the SWG poll.

Berlusconi received more fodder for his attacks against Monti today when the Bank of Italy announced that GDP contracted for a sixth quarter in the final three months of the year, and the central bank cut its forecast for this year to a contraction of 1 percent from a July prediction of -0.2 percent.

Original post is Berlusconi Rides Media Blitz, Recession to Gains in Polls by Euro Crisis.