Monday, February 25, 2013

Centre left takes strong lead in Italy election - polls

By Barry Moody and James Mackenzie

ROME (Reuters) - The centre left is strongly leading in Italy's election, raising the chances of a stable pro-reform government in the euro zone's third largest economy, according to two telephone polls published after voting ended.

Five Star Movement leader and comedian Beppe Grillo and his wife Parvin Tadjik arrive to cast their votes at the polling station in Genoa February 25, 2013. Italians began voting on Sunday in one of the most closely watched elections in years, with markets nervous about whether it can produce a strong government to pull Italy out of recession and help resolve the euro zone debt crisis. REUTERS/Giorgio Perottino

The polls on Sky and Rai television after voting ended at 3 p.m. (2 p.m. British Time) showed the centre left of Pier Luigi Bersani 5-6 points ahead of the centre right of former premier Silvio Berlusconi, with the anti-establishment movement of Genoese comedian Beppe Grillo taking third place.

The early polls cheered markets worried that the election could produce a weak, unstable government. Italian shares extended an earlier rally and bonds gained.

The poll for Sky television showed the centre left ahead by 5.5 points in the lower house and by six points in the Senate although the result there will depend on key battleground regions. In the most important, Lombardy, Sky said the centre left was tied with Berlusconi.

Sky had Bersani on 34.5 percent in the lower house, Berlusconi on 29 percent, Grillo on 19 percent and the centrist group of outgoing Prime Minister Mario Monti slumping to 9.5 percent after a lacklustre campaign that deeply disappointed his backers among foreign governments and investors.

The RAI poll showed a similar line-up, with the centre left six points ahead of Berlusconi in the lower house.

The spread between Italy's benchmark 10-year bonds and the German equivalent narrowed to less than 260 basis points after the poll results, in a sign of investor optimism that the centre left will be able to form a stable, pro-reform government.

The picture could change after computer projections of the result in both houses, expected shortly.

Italy's electoral laws guarantee a strong majority in the lower house to the party or coalition that wins the biggest share of the national vote.

However the Senate, elected on a region-by-region basis, is more complicated and the result could turn on a handful of regions, including Lombardy in the rich industrial north - which the polls showed was tied - and the southern island of Sicily.

Italy, the euro zone's third largest economy, is pivotal to stability in the region as a whole. The period of maximum peril for the currency was when Rome's borrowing costs were spiralling out of control at the end of 2011.

BITTER CAMPAIGN

A bitter campaign, fought largely over economic issues, has been closely watched by financial markets, anxious about the risk of a return of the kind of debt crisis that took the whole euro zone close to disaster and brought the technocrat Monti to office, replacing the scandal-plagued Berlusconi, in 2011.

Monti helped save Italy from a debt crisis, but the polls suggested few Italians see him as the saviour of the country, in its longest recession for 20 years.

A surge in protest votes supporting Grillo's 5-Star Movement had raised uncertainty about the chances of a strong, stable government that could fend off the danger of a renewed euro zone crisis.

Grillo's movement rode a huge wave of voter anger about both the pain of Monti's tough austerity programme and a string of political and corporate scandals. It had particular appeal for a frustrated younger generation shut out of full-time jobs.

"I'm sick of the scandals and the stealing," said Paolo Gentile, a 49-year-old Rome lawyer who voted for 5-Star.

"We need some young, new people in parliament, not the old parties that are totally discredited."

Bad weather, including heavy snow in some areas, was thought to have hampered the turnout in Italy's first post-war election to be held in winter. This could have favoured the centre left, whose voters tend to be more committed than those on the right, which has strong support among older people.

The 76-year-old Berlusconi, a billionaire media tycoon, pledged sweeping tax cuts and accused Monti of being a puppet of German Chancellor Angela Merkel in a media blitz that halved the lead of the centre left since the start of the year.

But many voters said they were sick of his broken promises and his campaign faltered at the end, with Grillo stealing some of his votes. The election could mark the end of a flamboyant two-decade career at the centre of the political stage.

Whatever government emerges will inherit an economy that has been stagnant for much of the past two decades and problems ranging from record youth unemployment to a dysfunctional justice system and a bloated public sector.

(Additional reporting by Stefano Bernabei, Steve Scherer, James Mackenzie and Giuseppe Fonte in Rome, Lisa Jucca in Milan and; Writing by Barry Moody; Editing by Robin Pomeroy)

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Monday, February 25, 2013

Centre left takes strong lead in Italy election - polls

By Barry Moody and James Mackenzie