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Bersani Wins President’s Mandate in Push for Deal

March 23 (Bloomberg) -- Pier Luigi Bersani won a mandate to seek backing to form Italy’s next government from the nation’s president, who urged him to compromise with rival Silvio Berlusconi.

Bersani, leader of the biggest bloc in parliament, will become prime minister if he overcomes a shortfall in support in the Senate, according to the mandate given to him late yesterday by President Giorgio Napolitano. The votes Bersani lacks in the upper house could be provided by Berlusconi, the former premier who leads the second-largest contingent of lawmakers.

“I have always illuminated the need for wide agreement among opposite sides on issues of general interest,” Napolitano said in Rome as he announced Bersani’s mandate. “I insist on the necessity of wide agreements of that kind to complement the process of forming a government.”

A revival of the defunct partnership between Italy’s two biggest political forces would be a reversal for Bersani. The 61-year-old former industry minister has repudiated the austerity program he enacted last year in alliance with Berlusconi and has criticized the billionaire for his criminal convictions.

Bersani will speak with the leaders of rival forces in the coming days and report back to Napolitano to say whether he has the backing to survive a confidence vote in the Senate. Those talks with political party leaders will begin no sooner than March 25, after Bersani meets with industry groups and labor unions, his party said in an e-mailed statement today.

Encourages Talks

The consultations will give Bersani the chance to widen his sweep after he spent three weeks unsuccessfully lobbying for support from Beppe Grillo’s Five Star Movement, the No. 3 Senate force.

“When I head into talks with the parties I will try to go with pretty clear ideas, with few words, but with precise intentions on the path to reform,” Bersani said at the presidential palace, appearing before reporters after Napolitano spoke. “I’m going to go with my ideas, naturally.”

Napolitano is nudging Bersani toward talks with Berlusconi to resolve the impasse created by inconclusive parliamentary elections last month. The president is seeking to oversee the formation of a government without resorting to a return to the polls. The fractious parliament must also find a compromise on a successor for Napolitano, 87, whose term ends in May. Italian presidents are elected by lawmakers and serve seven-year terms.

“I don’t think in Italy the idea of Bersani cutting a deal with Berlusconi would go down very well,” said Marc Ostwald, a strategist at Monument Securities Ltd. in London.

Bond Yields

Italian 10-year bond yields fell 7 basis points to 4.52 percent in Rome yesterday. That’s 7 basis points more than the 4.45 percent yield on Feb. 22, the last trading day before the general election left Italy with a fractured parliament.

Napolitano said he recognized “deep, historic differences” that may impede the creation of a coalition government. Still, the head of state encouraged Bersani to seek broad consensus on issues such as political reform, foreign policy and “institutional balances.”

Italy is under pressure to come up with a government as the 18-month recession drags on and the crisis in Cyprus renews speculation of a euro breakup. The Feb. 24-25 general election failed to produce a clear winner as voter disgust with budget rigor fueled Grillo’s rise. His euro-skeptic Five Star won a quarter of the popular vote and upset the traditional balance of power, dividing the electorate into three blocs.

Berlusconi Influence

Berlusconi, a three-time premier, is seeking to reassert his influence over Italian politics as he fights to overturn two criminal convictions and faces judgment in a trial in which he is accused of paying for sex with a minor.

“Bersani has to recognize that the elections left us with three forces of equal size and one of these has refused to give any sort of support to a government led by him,” Berlusconi said an interview broadcast by Italian television station TG5 after Napolitano’s announcement. “It’s clear that if they don’t involve our side of the political spectrum it won’t be possible to assemble a majority.”

Berlusconi, 76, is free from prison pending appeals on his tax-fraud and wiretapping convictions. The sex-with-minor case also carries an allegation of abuse of power. He has denied all charges and said the cases are politically motivated.

To contact the reporters on this story: Andrew Frye in Rome at afrye@bloomberg.net;

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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