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Italy Moves Closer to New Vote After Bersani Ultimatum

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Italy could be inching closer towards another election within months after center-left leader Pier Luigi Bersani issued an ultimatum to anti-establishment 5-Star Movement boss Beppe Grillo to support a new government or return to the polls.

Last week's inconclusive election, in which Grillo won a huge protest vote, left no group with a working majority in parliament, making an alliance with a rival the only way out.

In an interview on RAI state television late on Sunday, Bersani underlined his opposition to two of the options currently being floated - another technocrat government like the outgoing one led by Mario Monti or a grand coalition with Silvio Berlusconi's center-right.

That would leave only one possibility to avoid elections - Grillo's backing for the center-left, which won the lower house in the election but does not have enough support to rule in the Senate.

"Now (Grillo) must say what he wants, otherwise we all go home, including him," Bersani said.

Grillo has repeatedly said his populist movement would not give a vote of confidence to any government of established parties, although it could support individual laws.

The uncertainty in Italy, during a long limbo before talks to form a government begin after March 15, has unsettled international markets.

The spread between Italian 10-year benchmark bonds and German bunds - a measure of investor confidence - widened on Monday to an almost three-month high as the country entered its second week of gridlock.

Grillo last week called Bersani a "dead man talking" when he first made overtures to the 5-Star Movement, which became Italy's single biggest party in its first national test, taking a quarter of the vote.

Bersani's ultimatum may not work against Grillo and his tactics are apparently opposed by some of the leadership of his Democratic Party (PD).

The Genoese comic is widely believed to want to get back to the polls to wipe out the old order and boost his vote. He is also believed to fear his novice lawmakers could be suborned by cynical traditional politicians once they get into parliament.

"It's in his interest to go back to the ballot box as soon as possible," said Maurizio Pessato, vice chairman of polling institute SWG.

"Grillo can't win more than 8 million votes promising to get rid of the establishment and then immediately ally himself with the old guard," he added.

Nichi Vendola, leader of the left wing SEL party which is allied with Bersani, attacked Grillo on Monday, accusing him of trying to win more votes by rejecting an alliance.

"Even he is at a crossroads. Either he takes the challenge of a radical transformation of our country or he will be more of a politician than the others," Vendola said.

"If there is no agreement, it is better to return to the polls," Vendola added on his Facebook page.

President Holds Key

President Giorgio Napolitano, who is responsible for navigating the new crisis, has said he wants to avoid snap elections. He says he is not constitutionally permitted to dissolve parliament because his mandate ends on May 15.

Parliament must elect a new president before then, but although an election could theoretically be called as early as June, extended negotiations to try to avoid a vote are more likely to push the date back to the autumn.

Another election could, in any case, produce the same deadlocked result unless electoral law is changed first, which would require at least a temporary government.

One solution being floated is a temporary administration, perhaps of non-politicians, formed to pass a small number of pre-agreed reforms with elections in six months or a year.

Analysts also point out that before formal negotiations begin, politicians including Grillo are trying to gain an advantage through a string of statements to the press.

These may not hold once Napolitano starts banging heads in the negotiations.

In addition, Bersani needs to get through what could be a stormy meeting of his party leadership on Wednesday, when he is likely to come under fierce criticism for the conduct of the election, in which his colorless performance threw away a previously dominant opinion poll lead.

The name of young Florence mayor Matteo Renzi, an exciting orator who challenged Bersani for the leadership last year, is again emerging as a possible replacement.

Grillo has rebuffed Italy's media, calling them an arm of the establishment, and over the weekend staged his latest stunt to arouse their ire and frustration.

Wearing a hood over his head and hiding behind a pair of huge aviator sunglasses, Grillo took long walks on the beach near his Tuscan villa, refusing to speak to pursuing photographers and reporters.

On Monday and Tuesday, Grillo will meet the 163 novice 5-Star lawmakers, to talk about their strategy ahead of parliament's first session on March 15, and the subsequent consultations with Napolitano.

"Grillo is in the driver's seat," said Pessato, the pollster. "There will be another vote in a year's time at the maximum."

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