President Giorgio Napolitano has asked a select group of people to offer a policy platform to end the impasse in forming a new government in Italy.
Giorgio Napolitano named 10 “wise men” to work in two separate groups.
The president’s announcement ended speculation that he might resign – a day after political parties failed to agree a coalition government following February’s inconclusive election.
Giorgio Napolitano said he would serve out his mandate that ends on May 15.
Giorgio Napolitano named 10 “wise men” to work in two separate groups to end the impasse in forming a new government in Italy
Italy has been governed by a group of technocrats led by Mario Monti since late 2011 – when centre-right leader Silvio Berlusconi resigned in the middle of an acute economic crisis.
Giorgio Napolitano said that Mario Monti’s caretaker cabinet was still “operational” and “in charge”.
However, the continuing political stalemate is delaying reforms that could help revive Italy’s recession-hit, debt-laden economy.
Giorgio Napolitano finished consultations with Italy’s main political leaders on Friday.
In the absence of agreement, he said he asked “two small groups of personalities” to formulate “precise programme proposals” that could be supported by political parties – and serve as a basis for a new cabinet.
The first group will be asked to work on pressing political and institutional issues, while the second will focus on economic and social problems.
Among the 10 “wise men” are Enrico Giovannini, head of Italy’s Istat statistics agency, European Affairs Minister Enzo Moavero Milanesi, Bank of Italy deputy director Salvatore Rossi and Valerio Onida, a former judge on the country’s constitutional court.
“I want to underline one more time the need for all political parties to demonstrate their full awareness of the gravity and urgency of the problems facing the country,” Giorgio Napolitano said.
Italy’s parliament is currently split in three main blocs – each without enough seats to govern alone.
Pier Luigi Bersani’s centre-left coalition won the most votes in the February election, but failed to secure a majority in both houses of parliament.
The bloc has ruled out an alliance with Silvio Berlusconi’s centre-right alliance, which finished a close second.
The protest group Five Stars Movement led by former comedian Beppe Grillo garnered a quarter of the vote, but has refused to support either group.
Italy’s 10 “Wise Men”:
Political and institutional reform group
Prof. Valerio Onida – University of Milan constitutional law expert
Luciano Volante – former parliament speaker from Pier Luigi Bersani’s party
Mario Mauro – senator in Mario Monti’s party
Gaetano Quagliariello – senator in Silvio Berlusconi’s party
Economic and social reform group
Prof. Enrico Giovannini – statistics agency head
Giovanni Pitruzzella – Competition Authority head
Salvatore Rossi – Bank of Italy deputy head
Enzo Moavero Milanesi – European Affairs minister
5-6. Giancarlo Giorgetti and Filippo Bubbico – parliament commission heads
Italian comedian-turned-politician Beppe Grillo, whose Five-Star Movement (M5S) defied expectations to come third in last weekend’s elections, has ruled out a coalition with Pier Luigi Bersani’s centre-left bloc.
Pier Luigi Bersani’s Democratic Party (PD) won a majority in the Chamber of Deputies but fell short in the Senate.
Beppe Grillo said he expected Pier Luigi Bersani to agree a deal with Silvio Berlusconi’s People of Freedom (PdL).
The inconclusive polls have pushed up borrowing costs for the government.
On Wednesday, the Italian treasury sold 4 billion euros of new 10-year government bonds on the financial markets at a yield of 4.83%, up from 4.17% at its last sale in January, and 2.5 billion euros of new five-year bonds at a yield of 3.59%, up from 2.94%.
The latest rates are seen as bearable, but that the rises signal that investors want to see a strong Italian government, committed to economic reforms.
It is certainly possible that borrowing costs will rise further if the political uncertainty drags on for a long period.
Beppe Grillo said he would not support any new government and he expected fresh elections to be held within a year.
“Today in Italy, what will happen is what happened before. The right and the left will get together and will govern a country of rubble that they are responsible for,” he said.
“It will last a year. One. Maximum. Then there will be elections again. And once again, in the elections, the Five-Star movement will change the world,” he added.
Beppe Grillo, whose M5S defied expectations to come third in last weekend’s elections, has ruled out a coalition with Pier Luigi Bersani’s centre-left bloc
Beppe Grillo, 64, said the M5S would decide whether to support specific legislation on a case-by-case basis.
Any attempts to persuade the movement to take part in a government were fake, he asserted.
Beppe Grillo also rejected the suggestion that he was inciting popular anger, saying he should be thanked for giving angry people hope.
“There was no hope. It was an anger without hope. It is anger without hope that creates violence,” he explained.
“But anger with hope is a different kind of anger, an optimistic anger, it is not negative. We are containing this rage, so they should thank me. It is a democratic rage that is needed to go forward.”
On his blog, Beppe Grillo also published a mocked-up film poster depicting Pier Luigi Bersani as a Dead Man Talking, based on the 1950 Italian comedy, 47 Morto Che Parla.
“Bersani is a political stalker,” Beppe Grillo wrote.
“It’s been days that he has been bothering the M5S with indecent proposals rather than resigning [the leadership of the PD], as anyone else would have done in his place.”
The Democratic Party and its centre-left allies won a narrow victory in the Chamber of Deputies, but the Senate appears split with no party in control.
Silvio Berlusconi’s centre-right coalition is the second biggest bloc in the upper house. The seats under Beppe Grillo’s control in both houses could therefore prove crucial in making any coalition government viable.
On Tuesday, Pier Luigi Bersani outlined a series of policies for a PD-led government which appeared to mostly be in line with M5S’s manifesto.
He said any groups backing the government would have to vote for it in the confidence motion required when a new administration takes office, and urged Beppe Grillo to “assume his responsibilities”.
Meanwhile, a German opposition leader has made waves by describing Beppe Grillo and Silvio Berlusconi as “clowns”.
The Social Democratic Party’s candidate for chancellor, Peer Steinbrueck, told a rally in Potsdam that he was “shocked to a certain degree that two clowns have won” the Italian elections and made it clear he was referring to the two party leaders, calling the former prime minister “definitely a clown with a special testosterone boost”. Silvio Berlusconi has been embroiled in a series of sex scandals.
Italian President Giorgio Napolitano cancelled a dinner with Peer Steinbrueck after learning of his remarks, a spokesman for the SPD candidate said.
Giorgio Napolitano is still due to meet Chancellor Angela Merkel in Berlin on Thursday.
Both Beppe Grillo and Silvio Berlusconi campaigned against the austerity measures imposed by Italy’s technocratic Prime Minister, Mario Monti, which were supported by Angela Merkel.
European markets have opened lower, with the inconclusive election result in Italy raising fears that political deadlock will delay economic reforms.
Italy’s FTSE MIB index fell 4.7%, while London’s FTSE 100 shed 1.5% and share markets in Frankfurt and Paris also fell more than 2% at the start.
The yield on Italian government bonds also rose sharply, implying markets are more wary of lending to Italy.
Earlier, stock markets in Asia had closed lower.
Japan’s main Nikkei 225 stock index lost 2.2%, Hong Kong’s Hang Seng fell 0.8% and Australia’s ASX was down 1%.
Oil prices also dropped, hit by worries that uncertainty in the eurozone could hit demand, with Brent crude falling 87 cents to $113.57 a barrel.
With all domestic votes counted in Italy’s parliamentary election, the centre-left bloc won the lower house by a tiny margin, but did not secure a majority in the Senate.
Fears are that a split parliament will make it harder for one group to push through their plans to revive the economy, and that may stall Italy’s process of cutting its public debt levels.
Banks were the biggest fallers on the stock markets, with shares in major banks across Europe down more than 4%.
The yield on Italian 10-year government bonds rose to 4.77% from 4.48%, and the gap between the yield on Italian and German 10-year bonds widened.
European markets have opened lower, with the inconclusive election result in Italy raising fears that political deadlock will delay economic reforms
Former Prime Minister Silvio Berlusconi, who has conceded the lower house to Pier Luigi Bersani’s centre-left bloc, played down the significance of the spread, and said he was not worried about market reaction to the vote.
But Spanish Foreign Minister Jose Manuel Garcia-Margallo said there was “extreme concern” over possible movements in bond spreads as a reaction to the results.
“This is a jump to nowhere that does not bode well either for Italy or for Europe,” he said.
Giuseppe Fontana, professor of monetary economics at Leeds University Business School, said Italian voters had sent a “chilling message” to the markets and policy makers.
Georg Grodzki, head of credit research at Legal & General Investment Management, said the Italian result would leave markets guessing for a while.
“Uncertainty is not good for confidence. It’s not bad enough for an immediate abrupt sell-off but it could well build over the next few months into some crisis,” he said.
With political instability likely to continue at least in the near term, Angus Campbell from Capital Spreads said: “The uncertainty that this causes is enough to make anyone nervous and we are likely to see an interim administration for a number of months before fresh elections, unless a working coalition can be formed.”
For more than a year Italy was led by technocrat Mario Monti, appointed after Silvio Berlusconi’s resignation in November 2011 amid an acute debt crisis.
He was tasked with reforming the economy, and introduced unpopular economic austerity measures, implementing spending cuts and tax rises.
Mario Monti resigned in December after Mr Berlusconi’s conservative party withdrew its support from his government. Although he ran in the latest election, his bloc won only 10% of the vote, with the majority of voters rejecting austerity.
Ishaq Siddiqi, market strategist at ETX Capital, warned of future turmoil in Italy.
“What is more worrying for investors is that the political deadlock in Italy would suggest that even if we do see a market-friendly scenario materialize with a reform-minded government taking control, the fact that Berlusconi managed to gain such an influence with his anti-austerity campaign means that we are likely to see a rise in civil unrest in Italy.”
Investors are now looking towards a testimony later on Tuesday from US Federal Reserve chairman Ben Bernanke.
Global markets were shaken last week by an indication from the Fed that it might scale back its strong monetary stimulus sooner than expected.
Italy’s parliamentary elections have ended in stalemate and the possibility of a hung parliament.
With all domestic votes counted, Pier Luigi Bersani’s centre-left bloc has narrowly beaten ex-PM Silvio Berlusconi in the lower house but has failed to secure a majority in the Senate.
Control of both houses is needed to govern and a Berlusconi official said the election was “too close to call”.
A protest movement led by comedian Beppe Grillo won a quarter of the vote.
Meanwhile a bloc led by current Prime Minister Mario Monti came a poor fourth, with about 10%.
The outcome of the election, which comes amid a deep recession and tough austerity measures, was so close that the margin of victory given in interior ministry figures was less than 1% in both houses of parliament.
“It is clear to everyone that a very delicate situation is emerging for the country,” said centre-left leader Pier Luigi Bersani as the last of the votes were being counted.
Angelino Alfano, secretary of former PM Silvio Berlusconi’s People of Freedom party, said the result was “extraordinary”, and he urged the interior ministry to wait before declaring a final result.
The interior ministry figures were not official, he argued, and were “inevitably subject to a margin of error”.
With returns from all polling stations processed, the interior ministry figures gave Pier Luigi Bersani’s centre-left bloc 29.54% of the vote for the lower house (Chamber of Deputies), barely ahead of the 29.18% polled by Silvio Berlusconi’s bloc.
Angelino Alfano said the result was “too close to call” given the tight margin between the two blocs.
Votes cast outside Italy are still to be collected.
Pier Luigi Bersani also won the national vote for the Senate, but was unable to secure the 158 seats required for a majority.
As bonus seats are distributed in the upper house according to regional votes, Silvio Berlusconi’s centre-right bloc was expected to emerge with a higher number of seats.
Italy’s parliamentary elections have ended in stalemate and the possibility of a hung parliament
Silvio Berlusconi was heading for victory in three of the four big regions – Lombardy in the north, Campania in the centre, and Sicily in the south.
Initial exit polls on Monday afternoon gave Pier Luigi Bersani’s bloc a clear victory, prompting the Milan stock market to soar by nearly 4%.
But as the close result became clear the markets fell back. In New York, the Dow Jones Industrial Average fell 1.55% and Asian markets lost between 0.7% and 2.2%.
The apparent split between left and right in the eurozone’s third largest economy is likely to cause great anxiety among leaders in other EU member states.
A period of horse-trading will now follow, and the leading blocs will try in turn to form a coalition.
But, with the electorate apparently so divided, many believe a second election will have to follow in a few months.
Silvio Berlusconi, 76, left office in November 2011, facing claims of economic mismanagement as the eurozone struggled to contain Italy’s debt crisis.
Italians have had more than a year of technocratic government under Mario Monti. But his attempts to reduce spending caused widespread public resentment and his decision to head a centrist list in the parliamentary elections attracted little more than 10% of the vote.
“Some supposed we’d get a slightly better result but I am very satisfied, we are very satisfied,” he said.
In a surge in support, Beppe Grillo’s anti-austerity Five Star Movement attracted 25.54% of the vote.
Correspondents say this was an extraordinary success for the Genoese comic, whose tours around the country throughout the election campaign – hurling insults against a discredited political class – resulted in his party performing well in both chambers.
“We’ve started a war of generations,” Beppe Grillo said in an audio statement on his website which taunted the leaders of the mainstream parties.
“They are all losers, they’ve been there for 25 to 30 years and they’ve led this country to catastrophe.”
As the extent of his success became clear on Monday night, Beppe Grillo’s supporters in his home town of Genoa celebrated early into Tuesday morning.
Early exit polls from Italy’s general election show a lead for the centre-left bloc led by Pier Luigi Bersani.
The polls suggest Pier Luigi Bersani’s alliance has taken around 34% of the vote for parliament’s lower house, ahead of Silvio Berlusconi’s centre-right group with 29%, Sky Italia reports.
Beppe Grillo’s protest movement is projected to take nearly 20% of votes.
The two-day vote is seen as crucial for efforts to tackle Italy’s economic problems, as well as for the eurozone.
The election was called two months ahead of schedule, after Silvio Berlusconi’s party withdrew its support for Mario Monti’s technocratic government.
The first results based on partial vote counts are due in the next few hours.
If the exit polls are confirmed, they would echo the opinion polls prior to the election which made Pier Luigi Bersani’s centre-left Democratic Party (PD) a consistent frontrunner at nearly 35%.
Pier Luigi Bersani, a former Communist, has pledged to continue with the tough reforms of Mario Monti’s technocratic government, but suggests current European policy needs to do more to promote growth and jobs.
Silvio Berlusconi’s People of Freedom (PdL) centre-right alliance had narrowed the PD lead in the final weeks of campaigning – and may yet prevent Pier Luigi Bersani from winning an overall majority in the Senate, which is being fought on a region-by-region basis.
The fiercely anti-establishment Five Star movement of former comedian Beppe Grillo drew wide and growing support during the campaign, and threatened to be the major upset for the election.
Early exit polls from Italy’s general election show a lead for the centre-left bloc led by Pier Luigi Bersani
Italians have been voting in the final round of the contest for the leadership of the centre-left Democratic Party.
The run-off vote pitches veteran party leader Pier Luigi Bersani against Florence Mayor Matteo Renzi.
With the party leading opinion polls, the winner has a good chance of becoming Italy’s next PM in elections scheduled for early 2013, analysts say.
Those elections will choose a successor to PM Mario Monti’s government.
Mario Monti’s successor will face the challenge of addressing Italy’s deep-rooted economic problems.
Pier Luigi Bersani won the party’s primary on 25 November, winning 45% of the vote to Matteo Renzi’s 35.5%.
The two men are very different characters, with tieless, youthful Matteo Renzi, 37, painting himself as the voice of a new generation which wants to sweep away the entire class of older politicians.
By contrast, 61-year-old Pier Luigi Bersani is very much a figure from that older generation.
The final round of the contest for the leadership of the centre-left Democratic Party pitches veteran party leader Pier Luigi Bersani against Florence Mayor Matteo Renzi
A minister in previous governments, he accepts that the leftist establishment that he represents has disappointed its followers in the past, but emphasizes the importance of experience.
Speculation has been mounting as to whether Silvio Berlusconi would run for a fourth term in office, with the ex-premier suggesting last week that he was thinking about returning to politics.
The billionaire tycoon’s record has been tarnished by sex and political scandals, and he resigned as prime minister in November 2012, after MPs approved an austerity deal to help curb the debt crisis threatening the eurozone.