Italy Parties Still Far From Deal: Berlusconi Ally

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Formation of a new Italiangovernment is still a long way off and unless politicaldifferences can be overcome, the country may be headed for freshelections, a senior official of Silvio Berlusconi's center-rightparty said on Tuesday.

Last month's elections created a political deadlock, butpressure to form a government to address Italy's heavy debtburden and sluggish economy increased this week, when adifficult bailout of Cyprus rattled markets and stirred concernsabout the return of crisis to the euro zone periphery.

"What I can tell you is that our positions are still verydistant from each other, and if they remain distant in the next48 hours we will affirm that the only way is to go back tovote," People of Freedom (PDL) party secretary Angelino Alfanotold reporters after talks with center-left leader Pier LuigiBersani.

Bersani, whose alliance won the largest share of the vote inFebruary but fell short of a parliamentary majority, is meetingofficials from rival parties to try to muster support to form agovernment.

"As you have seen and heard, certainly the problems remain,we need to keep working," Bersani said after Tuesday'sconsultations.

The leader of the Democratic Party, a longtime rival of thePDL, Bersani has so far rebuffed approaches by the center-rightto form a coalition. He is due to finish talks with parties onWednesday and is likely to present his results to the Italianpresident on Thursday.

On Wednesday, Bersani will meet with deputies of the 5-StarMovement led by former comic Beppe Grillo. Grillo has repeatedlyand rudely rejected suggestions his group could support aBersani government.

Speaking beside Alfano, Roberto Maroni, the leader of theNorthern League party that is in alliance with the PDL, said hewould not accept another technocrat government like the outgoingadministration led by economist Mario Monti.