Protest votes add to uncertainty in close Italy election

ROME Sun Feb 24, 2013 11:42pm GMT

1 of 12. Outgoing Prime Minister Mario Monti waits before casting his vote at the polling station in Milan, February 24, 2013. Italians began voting on Sunday in one of the most closely watched elections in years, with markets nervous about whether it can produce a strong government to pull Italy out of recession and help resolve the euro zone debt crisis.

Credit: Reuters/Stefano Rellandini

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ROME (Reuters) - Italians finish voting in one of the most closely watched and unpredictable elections in years on Monday with a surge in protest votes fuelling concern that the ballot may not produce a government strong enough to pull Italy from its economic slump.

A bitter campaign, fought largely over economic issues, has been closely watched by financial markets, still wary after the debt crisis that took the whole euro zone close to disaster and brought technocrat prime minister Mario Monti to office in 2011.

For the euro zone, the stakes are high. Italy is the third largest economy in the 17-member bloc and the prospect of political stalemate could reawaken the threat of dangerous market instability.

Opinion polls give the centre-left coalition led by the veteran former industry minister Pier Luigi Bersani a narrow lead but the race has been thrown open by the prospect of a huge protest vote against austerity policies imposed by Monti and rage at a wave of corporate and political scandals.

Luigi Bartoletti, a 57-year-old salesman from Rome said he had voted for the anti-establishment 5-Star Movement of comic Beppe Grillo, who has electrified the race with a furious campaign against corruption and privilege in the elite.

"But unfortunately I don't believe there will be a stable government," he said. "The hope is that by voting for these people, even if they're inexperienced, there may be a minimum of checks on the management of public affairs."

The 5-Star Movement, heavily backed by a frustrated younger generation increasingly shut out of full-time jobs, has polled strongly and some believe it could challenge Silvio Berlusconi's PDL party as Italy's second largest political force.

But the 76 year-old Berlusconi has campaigned fiercely at the head of a centre-right coalition, pledging sweeping tax cuts and echoing Grillo's attacks on Monti, Germany and the euro in a media blitz that has halved the lead of the centre-left since the start of the year.

Support for Monti's centrist coalition meanwhile has faded and he appears set to trail in well behind the main parties.

Polling stations opened for the first day of voting on Sunday and by the time they had closed, some 54 percent of voters had cast their ballots, a sharp fall on the level of 62.5 percent seen at the same stage in the last election in 2008, interior ministry figures showed.

Voting ends at 3 p.m. (1400 GMT) on Monday with the first exit polls due shortly afterwards.

SENATE RACE

Whatever government emerges will inherit an economy that has been largely stagnant for much of the past two decades and problems ranging from record youth unemployment to a dysfunctional justice system and a bloated public sector.

At the same time, the credibility of the political system has been hit by corruption scandals and criminal investigations affecting state-controlled defence group Finmeccanica and Italy's third-largest bank Monte dei Paschi di Siena.

Despite the opinion polls suggesting the centre-left is leading, it is far from clear that Bersani will be able to control both houses of parliament and form a stable government capable of lasting a full five-year term.

Italy's electoral laws guarantee a strong majority in the lower house to the party or coalition that wins the biggest share of the overall national vote.

However the Senate, elected on a region-by-region basis, is more complicated and the result could turn on a handful of regions where results are too close to call, including Lombardy in the rich industrial north and the southern island of Sicily.

Many politicians and analysts believe Bersani and Monti will end up in an alliance after the vote, despite a number of spiky exchanges during the campaign and Monti's insistence that he will not join forces with Bersani's leftist allies.

For his part, Bersani, who has pledged to maintain the broad reform course set by Monti while doing more to help growth, says he would seek support from other parties and would be ready to offer the former European Commissioner a job in his government.

But there is no guarantee that it would be possible to form a stable alliance that would also include far-left partners or trade unions that have fiercely opposed key reforms by the Monti government including attempts to ease hiring and firing rules.

After repeated rounds of tax hikes and spending cuts, sliding wages and declining standards of living, Italians are increasingly weary of the austerity medicine prescribed by Monti to prevent Italy's huge public debt from sliding out of control.

However, doubts about any of the alternatives proposed by his political rivals have left many voters despairing of simple improvements and counting on the power of protest to change the whole system.

"I'm voting Grillo and I hope a lot of people do, because it's the only way to show how sick to the teeth we are with the old parties," said 34-year-old lab technician Manila Luce.

(Additional reporting by Stefano Bernabei and Gavin Jones; Editing by Stephen Powell)

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