Bersani Headed for Election Win Over Berlusconi, Poll ShowsAndrew Frye
Pier Luigi Bersani, the ex-communist who campaigned to maintain budget rigor, is on track to win Italy’s first election since Europe’s financial crisis broke out, according to a SkyTG24 Tecne poll.
Italian bonds and stocks rallied as the poll showed the populist campaigns of Beppe Grillo and Silvio Berlusconi fell short against the austerity advocates. Staying the course set by outgoing premier Mario Monti in the world’s third-biggest debtor is crucial to Europe’s effort to contain the turmoil that forced Berlusconi out of office in 2011.
“The market reaction tells us that there’s an enormous Berlusconi tail-risk relief rally,” said Marc Ostwald, a strategist at Monument Securities Ltd. in London. “Once we’ve gotten over the, ‘Oh thank goodness Berlusconi hasn’t won or got a controlling majority in the Senate,’ then people will say, ‘Yes, and what are you going to actually deliver now?’”
Italian 10-year yields fell 25 basis points to 4.19 percent at 3:41 p.m. in Rome, the biggest rally in five months. The FTSE MIB stock index climbed 3.6 percent, led by financial shares such as UniCredit SpA .
Bersani’s Democratic Party-led coalition probably captured a majority of 340 seats in the 630-member lower house, the Chamber of Deputies, SkyTG24 said in a statement today.
In the Senate, Bersani probably got at least 156 seats and may be able to arrive at the threshold for a majority, 158 seats, by allying with Monti, who is expected to get 21 seats, according to SkyTG24 Tecne. The poll had a margin of error of 2.5 percentage points.
Bersani’s forces may win as many as 169 seats in the 315-seat Senate, depending on the results of the battleground race in Lombardy, according to the poll. The SkyTG24-Tecne survey gave both Bersani and Berlusconi 37 percent of the vote in Lombardy, home to Italy’s business capital, Milan. Bonus seats in the Senate are doled out to the winners of each region.
Polls closed at 3 p.m. The Interior Ministry is expected to release official results later today.
It may take a month before a prime minister is formally nominated and a government formed. Italy’s new parliament will meet for the first time March 15, with the first order of business the election of presidents for both the Senate and the Chamber of Deputies. Italian President Giorgio Napolitano, the head of state, will then appoint a premier.
Monti was installed by Napolitano in November 2011 with Italy’s 10-year borrowing costs near 7.5 percent and Berlusconi, who is on trial for paying for sex with a minor and is fighting a tax-fraud conviction, the butt of jokes among his European counterparts.
Bersani was a partner in Monti’s broad parliamentary coalition, supporting the 20 billion euros ($26 billion) of austerity measures that have brought the yield down to about 4.45 percent -- its average between the introduction of the euro and the collapse of Lehman Brothers Holdings Inc. While that strategy has pushed Italy deeper into recession, Bersani stood by it and promised to maintain it.
The vote gave Italians the chance to repudiate the course charted by Monti through the debt crisis. Berlusconi, who backed Monti’s austerity for 13 months as part of the premier’s coalition, recanted in December and vowed to reverse the rigor and provide fiscal stimulus if elected. Grillo, a former comic, amassed a following by attacking Monti as too close to bankers and pushing for renegotiation of the sovereign debt.
“Bersani’s program doesn’t present any major change from the reforms and austerity plan implemented by Monti,” Annalisa Piazza, a fixed-income analyst at Newedge Group in London, said in an e-mail. His election is a “market-friendly scenario.”
The next government inherits a shrinking economy, mounting unemployment and the $2.6 billion debt load, which requires more than 30 billion euros of sales a month to finance. The administration will also take responsibility for a country ranked next-to-last in the World Bank’s ease-of-doing-business ranking among the Organization for Economic Cooperation and Development’s 31 high-income countries.
Bersani, a career politician, may become the second former communist to serve as Italian premier after Massimo D’Alema, who led the government from 1998 to 2000. Bersani opened up Italy’s energy market as an industry minister under former Prime Minister Romano Prodi and also had stints at the head of transport and economic development ministries.
Bersani, a fan of AC/DC and the Rolling Stones, is a father of two and married to a pharmacist. He defeated Matteo Renzi in the Democratic Party primary in December by outflanking his rival on the political Left thanks to the support of Vendola and the labor unions. Since the primary he has stressed his support for Monti’s budget rigor.