Italy’s deadlocked political forces are back at the bargaining table for a new round of talks after their failure earlier this month to form a government.
This time they’re vetting candidates to succeed President Giorgio Napolitano in a parliamentary vote that starts tomorrow, and investors are looking for a deal that could help resolve the government stalemate. Italian 10-year bond yields fell to a three-month low as talks continued between the two biggest parliamentary groups, led by Democratic Party head Pier Luigi Bersani and Silvio Berlusconi.
“It should be possible to find a compromise,” said Riccardo Barbieri, chief European economist at Mizuho International Plc. “It would be certainly viewed as at least a glimmer of hope that they can have an agreement on a government to last for a year or two and pass critical reforms.”
Parliament will start voting at 10 a.m. tomorrow in Rome and can hold two ballots a day until consensus is reached. Former Prime Minister Giuliano Amato and Sabino Cassese, a judge on Italy’s constitutional court, are the top candidates to bring Bersani and Berlusconi together, according to an aide to a Democratic Party lawmaker.
Yields on Italian 10-year debt fell 6 basis points to 4.25 at 5:15 p.m. That’s down from 4.89 percent at the close on Feb. 26, the day after Italy’s inconclusive general election left the country with a fractured parliament.
The Democratic Party today denied a report by news agency Ansa that Bersani had presented a list of candidates to Berlusconi that included Amato, former Prime Minister Massimo D’Alema and former speaker of the Senate Franco Marini.
The political standoff is pushing Bersani and Berlusconi, a billionaire three-time premier, to consider renewing the 13-month alliance that ended in December with the fall of Prime Minister Mario Monti’s government. The two leaders are being thrown together again by the emergence of Beppe Grillo, the ex-comic seeking to sweep established parties and politicians from power.
Napolitano’s successor will become the key figure in the effort to resolve the political deadlock that’s left a lame-duck government and a fractious Parliament. The head of state appoints the prime minister and, when stalemates prove intractable, dissolves parliament and calls snap elections. In times of impasse, the president acts as a broker among the rival political forces.
Grillo, head of the third-biggest parliamentary force, said yesterday that his more than 150 electors would back television journalist Milena Gabanelli for president. Gabanelli told newspaper Corriere della Sera today that she wouldn’t wouldn’t accept the nomination and wanted to continue her work as a journalist. Grillo posted a Twitter message today that law professor Stefano Rodota, who came in third in the party’s primary, had agreed to serve as the candidate.
The president is chosen by a 1,007-member electoral college comprised of all national lawmakers and some regional representatives. To win in any of the first three rounds, a candidate must secure two-thirds of the potential votes. From the fourth round an absolute majority is enough for victory. The president serves a seven-year term.
Bersani, whose coalition controls Italy’s lower house of parliament, needs help from forces led by Grillo or Berlusconi to secure a majority in the Senate as governments must have majorities in both houses of Parliament to legislate. Grillo said today that he expected Bersani would make a deal with Berlusconi, which would be “suicide for the republic.”
Amato, 74, was prime minister in 1992-1993 and in 2000-2001, and served at the head of the Treasury and interior ministries. A law professor by training, Amato entered Parliament as a member of Bettino Craxi’s Socialist Party in the 1980s and served as a Senator 2001-2006 with a forerunner to Bersani’s Democratic Party. Amato has been a senior adviser for Deutsche Bank AG in Italy since 2010.