No ‘grand coalition’ for Italy

“We came into this election with a set coalition, and the electoral law has alloted us a number of seats in the Chamber (of Deputies) and in the Senate which will allow us to govern,” Mr Prodi told journalists outside his campaign headquarters in Rome.

Mr Prodi’s centre-left Union alliance won the weekend elections, taking control of both chambers of parliament, according to full results released, but Mr Berlusconi has so far refused to concede defeat.

Mr Berlusconi claimed “a great many irregularities” may have marred results, and that a pivotal race for six Senate seats — representing Italians living abroad — could be invalidated.

“We cannot recognise the outcome of a vote until there is a definitive clear judgement. Until that day, no one can say they have won,” the prime minister told a news conference in Rome.

Mr Prodi won four of the six Senate seats.

Mr Berlusconi has demanded a recount, saying if each side took one house, Italy could follow Germany in creating a coalition joining the country’s main political opponents.

“I think maybe we should follow the example of some other European countries, like Germany, to see if there is a case for joining forces and governing together,” he said.

Slim lead

Official figures show that Mr Prodi won by a wafer-thin margin, just 25,224 votes.

Forza Italia’s national coordinator Sandro Bondi told the opposition coalition in a debate on Sky Italia that the contested votes could make a difference.

“For the moment, you have won nowhere: neither in the House, nor in the Senate,” said Mr Bondi.

But Mr Prodi shrugged off their concerns.

“Whoever wins, wins, that’s the beauty of democracy,” Mr Prodi told journalists as he arrived at his campaign headquarters.

Buoyed by his lower house victory, the 66-year-old economist seemed sure he would win in the upper house Senate too.

Despite his slim lead, Mr Prodi is automatically granted a minimum 340 of the 630 seats because of new Italian election legislation.

United for all

During his victory speech Mr Prodi promised a government for all Italians, even those who did not vote for him.

He vowed to lead a government that was “strong politically as well as technically.”

The vote count has taken Italy on a rollercoaster ride, initially seeming to hand an easy victory to Mr Prodi before switching to Berlusconi’s favor, then staying in a dead heat through much of the night.

The winning side must control both the lower and upper houses to be able to govern effectively and avoid legislative deadlock.

Uphill struggle

Analysts say the next government will have a hard time pushing through reforms because it will not have an unequivocal mandate from the electorate.

Whatever the outcome, warned ING analyst Paolo Pizzoli, “it is going to be difficult to govern and to find a way to implement structural reform.”

Economists say the future government will have to factor in the country’s public deficit and growing public debt, rigid labour markets, falling competitiveness and creaking pension system in developing economic policy.

Even before the vote, analysts were warning that a contested outcome, was a serious risk especially since neither side had put forward a detailed economic program.

Mr Berlusconi’s outgoing admimistration had committed itself to reducing the public deficit to within three percent of output, as demanded by the eurozone’s stability and growth pact, by 2007.

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