April 21 (Bloomberg) -- Italian President Giorgio Napolitano was elected to a second term after accepting a last-minute appeal from party leaders to run again, a step that may resolve the nation’s political crisis two months after inconclusive elections.
The 87-year-old incumbent got 738 votes, easily surpassing the 504 needed in Parliament, winning the backing of parties led by former premier Silvio Berlusconi, caretaker Prime Minister Mario Monti and outgoing Democratic Party leader Pier Luigi Bersani. His re-election yesterday came in Parliament’s sixth attempt to elect a president this week.
Napolitano, who earlier this year rejected requests to seek another seven-year term, said after yesterday’s appeal from party leaders that he couldn’t “ignore responsibility toward the country.” His first task will be to try and break the political impasse after the Feb. 24-25 elections produced a hung parliament.
His re-election caps a dramatic week in Italian politics. Bersani announced his resignation as PD leader on April 19 after his candidate for president, former premier and ex-European Commission President Romano Prodi, failed to win enough votes.
“Napolitano considered the risk of wasting all the efforts made in keeping Italy’s situation comprehensible at the international level,” Loredana Federico, a Milan-based economist for UniCredit SpA, said by phone. “After he’s sworn in, I would expect a very short period of consultation to form a government.” Napolitano will be sworn in tomorrow at 5 p.m. in Rome, news agency Ansa reported.
Italy’s next government must combat the longest recession in more than two decades and tackle public debt that will reach 130.4 percent of gross domestic product this year, more than twice the euro-region limit.
Still, markets have taken the two-month political gridlock in stride. The 10-year bond yield difference with German bunds narrowed to about 297 basis points on April 19, from a peak of 575 a week before Berlusconi resigned as prime minister in November 2011 and Monti was appointed by Napolitano to lead a government of non-politicians.
“Napolitano is a guarantee of continuity of the reform paths started by Monti,” Carlo Tommaselli, a banking analyst at Societe Generale SA, said by phone. “Napolitano’s confirmation may drive further spread-narrowing.”
While Italy’s credibility improved during Monti’s tenure, the former EU commissioner’s mix of spending cuts and tax increases pushed the nation deeper into its fourth recession since 2001.
The Italian economy contracted 2.4 percent in 2012 as unemployment remains close to a two-decade high amid falling household and business confidence, as well as shrinking domestic demand.
The Italian president, largely a ceremonial position, appoints prime ministers and, when stalemates prove intractable, can call snap elections. Following the February vote, Napolitano gave a mandate to Bersani to try and form a government. The center-left leader failed after talks with his opponents didn’t produce a compromise.
Former prime minister Giuliano Amato or Enrico Letta, a top Democratic Party official, may be asked by Napolitano to form a government, which may have two deputy prime ministers, Il Messaggero reported today. People of Liberty party’s Angelino Alfano and Civic Choice’s Mario Mauro may be deputy prime ministers should Letta be picked up by Napolitano, according to the newspaper. The new government program will be based on the reports submitted earlier this month to Napolitano by the so-called “wise men,” Il Messaggero reported.
Beppe Grillo’s Five Star movement, whose anti-austerity campaign won the support of a quarter of Italians, didn’t back Napolitano yesterday and instead voted for its candidate, Stefano Rodota. Grillo, a former comedian, termed Napolitano’s re-election a “coup,” according to comments on his website.
“They’re desperate; Napolitano, Bersani, Berlusconi and Monti met in a room and decided to keep Napolitano at the Quirinale” presidential palace, Grillo said yesterday, urging his supporters to demonstrate in Rome.
Senate President Pietro Grasso and Chamber of Deputies Speaker Laura Boldrini criticized Grillo’s comments in a joint statement.
Napolitano’s re-election “plays into the hands of Grillo and his supporters, who view this as yet another cynical back-room deal on the part of Italy’s old-guard politicians,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in e-mailed comments.
Napolitano was born on June 29, 1925 in Naples and in his late teens he interrupted his law studies to join the anti-Fascist underground movement and signed up as a member of the Italian Communist Party. Representing the moderate wing that sought integration with western European democracies, Napolitano influenced its transformation into the Democrats of the Left party.
He wrote several books, including “Beyond Old Boundaries” and “Europe and America after 1989,” that dealt with the changing political climate of the 1980s that saw the dismantling of communist regimes in eastern Europe.
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