Monday, February 25, 2013
Protest votes increase uncertainty in Italy election
By Gavin Jones and Naomi O'Leary
ROME (Reuters) - Italy's parliamentary election drew to a close on Monday with a predicted surge in protest votes raising uncertainty over the chances it will result in a government strong and stable enough to fend off the danger of a new euro zone crisis.
Opinion polls before the two-day vote gave the centre-left coalition led by Pier Luigi Bersani a narrow lead and Italian stocks and bonds rose as traders bet on a pro-reform government possibly backed by outgoing Prime Minister Mario Monti.
But the race has been complicated by deep voter anger against biting austerity measures and a wave of political and corporate scandals, boosting the anti-establishment 5-Star Movement.
"I'm sick of the scandals and the stealing," said Paolo Gentile, a 49-year-old Rome lawyer who said he had voted for 5-Star, which is set to make a huge impact at its first general election.
"We need some young, new people in parliament, not the old parties that are totally discredited," he said.
Many voters interviewed outside polling stations by Reuters on Sunday and Monday expected the next government would quickly collapse, thwarting efforts to end an economic crisis that has plunged Italy into its longest recession for 20 years.
"I'm very pessimistic, I don't think that whoever wins will last long or be able to solve the problems of this country," said Cristiano Reale, a 43 year-old salesman in Palermo, Sicily. He said he would vote for the far left Civil Revolution group.
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 technocrat prime minister Monti to office in 2011.
Italy, the currency bloc's third largest economy, is pivotal to stability in the region as a whole. The period of maximum peril for the euro common currency was when Rome's borrowing costs were spiralling out of control at the end of 2011.
So far investors have been relatively sanguine, betting on a stable government with a market-friendly policy stance.
But it is unclear if such a government would be strong or united enough to push through reforms.
"There are similarities between the Italian elections and last year's ones in Greece, in that pro-euro parties are losing ground in favour of populist forces," said Mizuho chief economist Riccardo Barbieri.
"An angry and confused public opinion does not see the benefits of fiscal austerity and does not trust established political parties."
Voting ends at 3 p.m. (1400 GMT), with the first polls of the likely result due shortly afterwards. Projections based on the vote count will be issued through the afternoon and the final result should be known late on Monday or early Tuesday.
An extremely close Senate race is expected in several battleground regions and this could delay the final result.
The election result is likely to be the most fragmented in decades, with the old left-right division disrupted by the rise of 5-Star, led by fiery Genoese comic Beppe Grillo, and by Monti's decision to run at the head of a centrist bloc.
"It will be a vote of protest, maybe of revolt," said Corriere della Sera, Italy's largest newspaper, on Monday.
It noted that for the first time the winning coalition is unlikely to get more than a third of the votes, making it harder to govern and likely opening weeks of complicated negotiations.
It is unclear how Grillo's rise will influence the result, with some pollsters saying it increases the chances of a clear win for the centre-left, led by Bersani's Democratic Party (PD), because 5-Star is taking votes mainly from Berlusconi.
After the first day of voting on Sunday, about 54 percent of voters had cast their ballots, a sharp fall on the level of 62.5 percent seen at the same stage in the last election in 2008.
Bad weather, including heavy snow in some areas, is thought to have hampered the turnout in Italy's first post-war election to be held in winter. This could favour the centre-left, whose voters tend to be more committed than those on the right, which has strong support among older people.
"Given the lower turnout, people are betting on a victory of the centre-left," said a Milan trader.
CALL TO ARMS
The 5-Star Movement, backed by a frustrated younger generation increasingly shut out of full-time jobs, could challenge former premier Silvio Berlusconi's People of Freedom (PDL) party as Italy's second largest political force.
"Come on, it isn't over yet," was Monday's front page headline in Il Giornale daily, owned by Berlusconi's brother, a call to arms to get out the vote.
The 76-year-old Berlusconi, has pledged sweeping tax cuts and echoed Grillo's attacks on Monti, Germany and the euro in an extraordinary media blitz that has halved the lead of the centre-left since the start of the year.
Support for Monti's centrist coalition meanwhile has faded after he led a lacklustre campaign and he appears set to trail well behind the main parties.
Monti helped save Italy from a mounting debt crisis when he replaced a discredited Berlusconi in November 2011, but with the economy in its longest recession for 20 years, polls suggest that few Italians now see him as the saviour of the country.
"I voted for the PD because a PD win is the only way to have a stable government and we need stability or we will end up like Greece," said Viola Rossi, an 80 year-old pensioner from Rome.
After drawing hundreds of thousands of supporters to its final campaign rally on Friday, Grillo has said he fears voting fraud to try to block a massive breakthrough, telling his supporters to wet the lead in the pencils they use to vote to prevent the crosses being rubbed out.
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.
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, expected to be the centre-left.
However the Senate, elected on a region-by-region basis, is more complicated and the result could turn on a handful of regions where results are too close to call, including Lombardy in the rich industrial north and the southern island of Sicily.
Many politicians and analysts believe Bersani and Monti will end up in an alliance after the vote, despite a number of bad-tempered exchanges during the campaign and Monti's insistence that he will not join forces with Bersani's leftist allies.
As well as the national election, voters are also casting their ballots to elect new regional administrations in Lombardy, Lazio and Molise.
(Additional reporting by Stefano Bernabei, Steve Scherer, James Mackenzie and Giuseppe Fonte in Rome, Lisa Jucca in Milan and; Editing by Barry Moody and Philippa Fletcher)
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