Italy Stalemate Broken, Napolitano, 87, Elected for Another 7-Year Term

In a move that cannot possibly solve anything Italian Lawmakers, Re-elect President to Second Term.

In a bid to quiet growing political chaos, Italian lawmakers on Saturday elected President Giorgio Napolitano to a second term, turning to him as the last best hope to break a profound deadlock.

The election of Mr. Napolitano, supported by both the main center-left and center-right parties, suggested that the two sides would now be more willing to negotiate the formation of a government. But it also infuriated the anti-establishment Five Star Movement of Beppe Grillo, which won a quarter of the recent parliamentary vote.

While he cannot prevent a grand coalition, one including both major parties, from forming, Mr. Grillo could complicate matters by stirring renewed anger against the old political establishment, which is in upheaval.

After Mr. Grillo called on his supporters to take to the streets, hundreds of protesters gathered in front of the Parliament building, many holding placards in support of Five Star’s candidate, Stefano Rodotà , a legal expert and former leader of the center-left, which nonetheless did not back him. Mr.dà is “not part of the old guard,” said one protester, Anna Maria Vatrella, an unemployed social worker. “All the left knows how to do is to hold on to the power they have. They have no interest in change. They have no idea what it means to live as normal people do.”

Pier Luigi Bersani Announces Resignation

In case you missed it late Friday Italy centre-left leader Pier Luigi Bersani announced resignation

Mr Bersani’s move came after backers in his party voted down two candidates that he had proposed for the role of president. Late on Friday night, he accused fellow party members of betraying him, adding that there was a “tendency in some towards permanent destruction.”

The centre-left’s implosion is the latest reminder of how it is made up of a string of parties, from former communists to Christian democrats who have never gelled, failing to hold a government together when elected in 2006 and never mounting a truly convincing opposition to Silvio Berlusconi.

While the centre-left has stumbled since the election, former prime minister Silvio Berlusconi’s centre-right coalition has taken a lead in the polls. Mr Bersani’s exit could allow his photogenic young rival in the Democratic Party, Matteo Renzi - who also appeals to right wing voters -- to take charge.

Yesterday, Giorgio Napolitano, the 87-year-old incumbent president, agreed to accept a mandate for a second term as a president in order to end the impasse over who should do the job. He had previously sought to avoid standing again because of his advanced age.

As I said, Bersani's days were numbered. Little did I know they would be this numbered. Now what?

Napolitano could not form a grand coalition before so why can he do so now? The only thing that has changed is Bersani is gone and the supporters of Grillo are madder than ever.

Given that both Berlusconi and Grillo have a chance at winning the next election outright, both have a reason to want new elections. Berlusconi has another objective, however, and that is coming up with any deal that avoids prosecution.

With that in mind, an unstable "grand coalition" of sorts may be temporarily possibile. If so, expect the coalition to dissolve as soon as Berlusconi gets the immunity he seeks.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com