ITALY LOOKS UNSTEADY AFTER CLOSE ELECTION WIN BY CENTER-LEFT PARTY

by Sabina Zaccaro

(IPS) ROME -- Ten years after the first match between Romano Prodi and Silvio Berlusconi in 1996, the final count from the April elections suggests that governability in Italy is still a challenge. Prodi's center-left Union won by such a razor-thin margin that it will be difficult to form a government capable of leading a deeply divided nation.

Election results released the night after polls closed Monday reveal a deep divide, with the two main coalitions' vote tallies dead even. The mail-in votes of 1.1 million Italians living abroad, choosing six of the Senate's 315 members and 12 of the 360 members of the Chamber of Deputies, ultimately proved decisive.

The highest expatriate participation was from Italians living in Latin America (51.8 percent of the 2.6 million eligible), who elected three deputies and two senators.

Prodi's center-left Union coalition, which ranges from pro-Vatican moderates to unreformed Communists, claimed victory early Tuesday. But it is such a narrow margin that a worrisome scenario has arisen.

Union had achieved a majority in the Chamber of Deputes by 25,000 votes as of Monday night. For the Senate, Prime Minister Berlusconi's coalition initially had the lead, but the tally of votes from Italians abroad reversed that trend -- assigning 158 seats to the Union and 156 to the center-right House of Freedoms.

In fact, four of six senators elected by voters abroad are from Union, one is from the prime minister's Forza Italia party and the sixth is Luigi Pallaro, from the independent list "Associazione Italiani in Sudamerica." Elected in Argentina, Pallaro has said he will support the Union, giving that coalition five of the six senators representing Italians living abroad. This was the first general election in which the expats were eligible to vote.

Painted as a sort of romantic old-fashioned "pizza and mandolini" nostalgic group by some of the Italian media, the expats proved to be pragmatic, modern, post-ideological voters.

Nevertheless, Union's 158 Senate seats fall short of a majority, set at 162. To reach that threshold they need support from four of the Senate's seven life members. One of them, former president Francesco Cossiga, already stated that, being an institutional representative rather then an elected member, he will not vote in any of the sessions related to new government actions. Will others follow suit?

Regardless, a few seats more or less in the Senate or Chamber of Deputies don't really change the game. There seems to be a growing feeling of a missed opportunity for change, that the country's future is bound by an enternched sort of balance.

It will be a challenge for the weak new government to aggressively face the policy priorities that cannot be postponed anymore, while at the same time dealing with a strong opposition.

The political uncertainty arising from the elections represents the worst scenario for the Italian economy. The Milan stock exchange opened Tuesday down by 0.73 percent and reached -1.0 percent at 11am local time, indicating misgivings about the new situation. A warning bell was promptly sounded by the credit rating agencies Standard & Poor's and Fitch, which are forecasting a long-term rating downgrade if Italy does not rapidly reduce its public debt.

Italian GDP (gross domestic product) growth, which has averaged less than one percent a year over the past five years, has all but stalled again, as has productivity growth. The competitiveness of Italian industry has declined sharply since the country adopted Europe's single currency, the euro.

To cap it all, public finances are a mess: the budget deficit stands at over four percent and the public debt at 106 percent of GDP -- and both are rising.

Equally urgent, from a social and economic point of view, is the labor market issue. Legions of young Italians express frustration over a work world that increasingly strings them along with short-term contracts, resulting from the labor reforms introduced by Berlusconi's government.

"That is one of the most urgent issues raised by common people we met in the streets during the election campaign," said Livia Turco, social affairs coordinator for the Democrats of the Left party (part of the Union coalition), in a recent interview. "The new government has to face it immediately."

Another growing social emergency is immigration. The outgoing government refused to consider welcoming foreign-born workers. Through the restrictive Bossi-Fini immigration law approved in 2002, the government introduced a tough policy that allowed only an annual quota of foreign workers with existing job contracts to obtain a residency permit. Undocumented people are promptly expelled. Prodi's Union promises to change that as soon as possible.

Some commentators are also worried about the more extreme leftist parties within the winning coalition, especially the unreformed Communists, who performed strongly in the election. Prodi's new government will depend on their support and will have to mediate their clear opposition to large-scale reforms.

According to center-left leaders, this situation will facilitate cohesion and close relations. "We will bring a sense of unity to politics," Prodi told journalists shortly after the confirmation of the near-final figures Tuesday morning.

The first thing on Parliament's agenda after inauguration is to elect a new president to replace Carlo Azeglio Ciampi, whose term is up in May. The newly elected head of state will then grant the task of forming the government to the leader of winning coalition. It could take several weeks to get the whole job done.

And by then, Italy's financial and competitive positions may have deteriorated further.

Berlusconi's center-right coalition strongly contested the election results, calling for the Constitutional Court to count the ballots by hand, in particular some 500,000 votes declared spoilt at first scrutiny.

Union's win is not an exciting one -- because it means a weak government -- but it is legitimate, and Prodi shows no doubts that his government will be durable and successful.

In the dying moments of the election drama, Berlusconi's government won a bonus point: stealing front-page news away from the elections on Tuesday was the capture of an alleged mafia boss, Bernardo Provenzano, who was on Italy's most-wanted lists for more than four decades.