Italy Vote Seen Inconclusive as Risk of Second Ballot Grows

Italy’s election in three weeks may yield a hung parliament, requiring a follow-up vote to establish a governing majority, a member of poll leader Pier Luigi Bersani’s campaign said for the first time.

“Returning to polls is the answer in a situation of ungovernability,” Stefano Fassina, Bersani’s head of economic policy, wrote on Twitter yesterday.

Bersani’s lead in opinion polls is shrinking as former Premier Silvio Berlusconi gains. The difference between their two blocs nationally was within the 4 percentage-point margin of error for a second day, according to a Tecne poll aired by SkyTG24 yesterday. The gap fell to less than 5 percentage points in six key regions that will determine the outcome in the Senate, Tecne said.

Fassina is the first leading figure of Bersani’s Democratic Party to suggest a second vote may be required should his party -- even in coalition with Prime Minister Mario Monti -- fall short of a majority in both houses of parliament.

Italian markets have slumped in the past week as surveys showed Berlusconi gaining. The yield on 10-year bonds was 4.53 percent at 11:30 a.m. Rome time, up from 4.13 percent Jan. 25.

Offering Rebates

Berlusconi, who is appealing a conviction on tax fraud, has offered rebates to Italian taxpayers and an amnesty to evaders, campaign pledges that are resonating with voters and rattling investors. Monti says Berlusconi is re-proposing the kinds of policies that almost forced Italy to accept a bailout in late 2011.

Under Italy’s election law, Bersani would gain a majority in the lower house Chamber of Deputies even if he wins by a narrow margin because bonus seats are given to the winner. In the Senate, the bonus premium works regionally, making a majority more elusive.

Berlusconi’s gains signal that Bersani and his allies risk falling short of a 158-seat majority in the Senate, Tecne’s projections based on polls in 19 out of Italy’s 20 regions show. The projections didn’t include the six Senate seats chosen by Italians living abroad.

“Absolutely not,” Bersani said last night in an interview on La7 television, when asked whether he would be open to a coalition including Berlusconi. “We need a government up to a real change, unnatural or complicated alliances are not possible any longer.”

Striking a Deal

Bersani would be able to assemble an outright majority in the Senate only by striking a deal with Monti’s centrists, according to projections by the SWG institute based on its polls aired on RAI3’s television program Agora today. Bersani’s center-left bloc would get 146 seats in the upper house, while teaming up with Monti may give it a 167-seat majority, SWG said.

Comedian-turned-politician Beppe Grillo’s Five Star Movement would get 39 seats, while Berlusconi’s bloc would have 102 senators, according to the SWG projections, which don’t take into account the senators elected abroad.

Support for Bersani’s bloc increased one percentage point to 33.8 percent from the last SWG poll on Feb. 1, leaving the gap with Berlusconi’s coalition at 6 percentage points. Monti’s bloc is polling at 13.4 percent, while the Five Star Movement gained almost a full percentage point in a week and is now at 18.8 percent, according to SWG.

Bersani reiterated yesterday that he’s open to working with Monti after the vote, though the premier made it clear he won’t join a government including Bersani’s ally Nichi Vendola.

The idea of “a Vendola-Monti government is political fiction,” Vendola said today, according to Ansa news agency.

Before it's here, it's on the Bloomberg Terminal.