it's now too close to call- remember MrB changed the whole proportional election processs and has absolutely no scruples- before you crow!

From the Financial Times:

By Tony Barber in Rome

Published: April 10 2006 10:32 | Last updated: April 10 2006 23:40

Silvio Berlusconi and Romano Prodi were locked in a close battle for power on Monday night as Italy’s general election failed to produce a clear-cut victory for either the centre-right prime minister or his centre-left rival.

Early exit polls had pointed to a comfortable win for Mr Prodi, but as results flowed in it became clear that Mr Berlusconi had performed more strongly than opinion polls had forecast throughout the two-month campaign.

With the two sides virtually level in the race for parliament’s lower house, and separated by a thin margin in the Senate contest, Italy was revealed as a country split almost evenly between right and left.

The result – suggesting the next government would be too weak to pursue reforms – would be the least satisfactory for world financial institutions keen to see Italy address its serious economic problems.

Politicians in both camps said another election might be necessary this year to obtain a clearer result. Most rejected the idea of a “grand coalition” along German lines, saying the animosity between parties was too intense.

Paolo Cento, of the opposition Green party, said: “If there’s no clear majority, there will have to be another election.”

According to computer projections by Nexus, a polling organisation, the government was likely to take 49.8 per cent of the vote in the race for the lower house and the opposition was on course to win 49.7 per cent. But a projection by the Piepoli institute put the centre-left ahead by 49.9 to 49.7 per cent.

These margins were so narrow as to render the final result impossible to predict. However, under new rules introduced by the Berlusconi government last year, the winner of the race is guaranteed at least 340 seats in the 630-seat chamber, assuring a majority regardless of its victory margin.

In the 315-seat Senate, Mr Berlusconi’s forces were projected to win 158 seats and the opposition 151 seats. There were no forecasts for the remaining six seats, which go to senators representing Italians abroad.

Umberto Bossi, a Berlusconi ally who leads the populist Northern League party, said the prime minister had again proved his critics wrong. He said: “Where I come from, there’s an old proverb: ‘He who laughs last laughs longest’.”

Turnout in the election was estimated officially at 83.6 per cent, above the 81.4 per cent recorded in Italy’s 2001 election and a likely factor in the better than expected performance of the centre-right.

Even so, it was a relatively disappointing night for Forza Italia, the party Mr Berlusconi created 12 years ago as a vehicle for his political ambitions. In the lower house contest, Forza Italia was predicted to win 23.6 per cent of the vote, well down from 29.4 per cent in 2001.

Even if Mr Berlusconi were to achieve narrow victories in both chambers and form a government, Forza Italia’s result would risk undermining his ability to control his coalition allies.

For Mr Prodi, victory would still leave him dependent on the communist and radical parties that form the left flank of his coalition.

http://news.ft.com/cms/s/86971d62-c872-11da-b642-0000779e2340.html

From the Financial Times:

By Tony Barber in Rome

Published: April 10 2006 17:04 | Last updated: April 10 2006 21:50

Silvio Berlusconi, prime minister, and his centre-right coalition snatched an apparent victory from the jaws of defeat in the race for the Senate, Italy’s upper house of parliament, by producing an unexpectedly strong performance in several regional contests.

According to computer projections from Nexus, a polling organisation, Mr Berlusconi’s coalition pipped the centre-left opposition in the northern region of Piedmont, the central region of Lazio and the southern region of Puglia.

If confirmed, these victories would make a decisive difference to the overall result. According to Nexus, they would give Mr Berlusconi’s forces 158 seats in the Senate and the opposition 151 seats.

Another six seats were to be allocated to senators elected by Italian citizens voting abroad. It was not clear on Monday night who had won these seats.

The result in the Senate is just as important as that in parliament’s lower house because, unusually for a western democracy, the legislative powers of Italy’s upper house are equal to those of the other chamber.

Mr Berlusconi’s government passed constitutional reforms last year that aim to turn the Senate into a chamber that would concentrate on regional issues, while the lower house would deal with national policies. These reforms will be submitted to a referendum, expected in June.

The centre-right was defeated in Piedmont, Lazio and Puglia last April, when Romano Prodi and the centre-left opposition crushed the government by winning 12 out of 14 regional races.

Under new voting rules introduced by Mr Berlusconi’s government last year, the Senate’s 315 seats were allocated in this election on a region-by-region basis.

The winning coalition in each region took 55 per cent of the seats available, even if it did not win an absolute majority of the votes in that region.

The results of this new system were evident in Piedmont, where the centre-right was projected to have beaten the centre-left by 50.7 to 49.3 per cent and to have won 13 seats to the opposition’s nine.

In Lazio, the region that includes Rome, the national capital, the centre-right was projected to have taken 50.1 per cent of the vote compared with the centre-left’s 49.2 per cent. This would give the centre-right 15 seats to the opposition’s 12.

Finally, in Puglia the centre-right was estimated to have beaten the centre-left by 52.0 to 47.9 per cent. That would give the government 12 seats to the opposition’s nine.

Overall, the centre-right’s performance showed that the strongholds of its support are mostly in northern Italy, especially in Lombardy – which contains Milan, the nation’s financial capital – and in Veneto, a region famous for small and medium-sized companies and self-employed businessmen.

But the centre-right also scored a convincing victory on the island of Sicily, where it was estimated to have won by 57.1 to 41.2 per cent.

As in most recent elections, national and local, the centre-left achieved its best results in the so-called “red belt” of central and north-central Italy, containing the regions of Emilia-Romagna, Tuscany, Umbria and Le Marche.

http://news.ft.com/cms/s/ca24d172-c8aa-11da-b642-0000779e2340.html

From the Financial Times:

By Tony Barber in Rome

Published: April 10 2006 16:15 | Last updated: April 10 2006 23:30

As the nervous excitement mounted on Monday in Italy’s general election, it fell to Standard & Poor's, a credit ratings agency, to strike a sober note of realism.

Half an hour after the first exit polls predicted triumph for Romano Prodi – a forecast later overtaken by events – S&P warned that it might cut Italy's long-term credit rating this year “unless there are signs of a sustainable and coherent strategy to reduce the public debt”.

It was a reminder of the hard work that lies ahead for the next government, whatever its political complexion. Mr Prodi guided Italy towards eurozone membership in his 1996-98 government, and was critical in this campaign of the management of the public finances under Silvio Berlusconi, prime minister.

Mr Berlusconi responded by calling Mr Prodi a prisoner of his far-left political allies, who were addicted to raising taxes and punishing the middle classes with a policy of income redistribution.

S&P cut Italy's rating to AA- in July 2004, making it the first eurozone country to suffer this humiliation. Last year the Italian debt rose to 106.4 per cent of gross domestic product, its first increase since 1994.

Moreover, Italy's budget deficit climbed last year to 4.1 per cent of GDP, and the centre-right government disclosed during the election campaign that it was raising this year's deficit forecast to 3.8 from 3.5 per cent.

The challenge that now faces Italy is how to restore discipline to the public finances, when it seems unlikely that either Mr Berlusconi’s centre-right coalition or the centre-left opposition will have legislative majorities commanding enough to force cuts in public expenditure.

The worst outcome would be for one coalition to control one chamber of parliament and the opposite coalition the other, for this would virtually guarantee policy paralysis. Another election would almost certainly be necessary, but it would be difficult to hold it before October.

In the meantime, the next government must prepare Italy’s annual four-year economic planning programme in June as well as a draft of the 2007 budget in September.

One of Mr Berlusconi’s most eye-catching campaign promises, revealed at the end of a formal televised debate with Mr Prodi, was to abolish a property tax on homeowners that raises €2.3bn ($2.7bn, £1.6bn) a year.

The tax is an important source of revenue for local governments in Italy, which rely on it to finance the provision of public services, but Mr Berlusconi did not explain how he intended to cover the cost of abolishing the levy.

Meanwhile, he wooed elderly voters by promising an increase in the minimum pension to €800 from €550. The centre-right was vague about how it would pay for these and other spending promises.

For his part, Mr Prodi promised that if he won, he would conduct a thorough review of the public finances. But some uncertainty hung over his plans to reduce the debt and deficit because he modified his programme during the campaign.

To boost Italy's international competitiveness, Mr Prodi wanted to cut payroll taxes by 5 percentage points in his first year of office, at a cost of €10bn.

Under pressure from Mr Berlusconi, however, Mr Prodi dropped a proposal to finance the measure by increasing capital gains tax on government bonds. He also raised the threshold at which he said he would reintroduce inheritance tax.

Mr Prodi said a crackdown on tax evasion would pay for part of the payroll tax cuts, and also promised a rigorous approach to public spending. His aim was to rebuild Italy's primary budget surplus, the budget balance net of debt-servicing costs. This fell to 0.5 per cent of GDP last year from 3.2 per cent in 2001, when the last centre-left government left office.

Among other measures that centre-left leaders regarded as priorities were a plan to reduce incentives for companies to hire temporary staff and the abolition of a Berlusconi government reform that raises the minimum retirement age to 60 from 57 in 2008.

These proposals did not please advocates of more flexible labour markets and more drastic reforms of the state pension system, but they were intended to satisfy the communist and radical parties that form the left flank of Mr Prodi's coalition.

http://news.ft.com/cms/s/6f48775a-c8a4-11da-b642-0000779e2340.html

Early estimates suggest that turnout for the elections was high
Italy's general election is turning into an extremely close race, with early results pointing to a slender lead for PM Silvio Berlusconi.

Mr Berlusconi's centre-right coalition may narrowly retain control of both houses of parliament, according to projections from the Nexus pollsters.

Earlier, exit polls pointed to a narrow lead for his centre-left challenger, Romano Prodi.

Polling stations closed at 1500 (1300 GMT), after two days of voting.

The Nexus projections, carried on the state broadcaster Rai, gave Mr Berlusconi's forces 49.9% in the Chamber of Deputies (lower house), and Mr Prodi's bloc 49.6%.

For the Senate the projections gave Mr Berlusconi's bloc 158 seats and Mr Prodi's 151.

Another six Senate seats are for overseas constituencies, seven for life senators.

Correspondents say exit polls in previous Italian elections have often turned out to be inaccurate.

The interior ministry says early estimates point to a turnout of about 85% - higher in the north than the south, with the lowest turnout being on the islands of Sardinia and Sicily.

Mr Berlusconi, a billionaire, has led Italy's longest-serving government since World War II, but the economy has proven sluggish for much of his tenure.

The formation of a new government would have to wait until after the election of a new Italian president next month. President Carlo Azeglio Ciampi's seven-year term of office is about to expire.

Acrimonious campaign

The campaign was marked by acrimony, with Mr Berlusconi using vulgar language to describe left-wing voters and Mr Prodi likening him to a drunkard.

Mr Berlusconi's coalition has failed to revive the ailing economy
Mr Prodi, a former president of the EU Commission, was narrowly ahead in most opinion polls until they were suspended 10 days ago under electoral law.

His mild-mannered - some say lacklustre - style contrasts sharply with Mr Berlusconi's media-savvy flamboyance.

Mr Berlusconi has battled to fend off prosecution for alleged corruption and conflict of interest over his media empire.

He accompanied his 95-year-old mother to the polls. A scrutineer reproved him, half in jest, when he showed his mother where to put a cross against his Forza Italia Party on the ballot paper, the BBC's David Willey reported.

Mr Prodi, who beat Mr Berlusconi in a general election 10 years ago, voted in his home town Bologna.

Both leaders face the tricky task of holding together broad coalitions. That task could be made harder by the new proportional voting system, which is expected to result in a smaller parliamentary majority.

Mr Berlusconi, Italy's richest man, has struggled to translate his personal success as a tycoon into progress for the economy. Growth has slowed to an average of 0.6% a year.

There is a chance, depending on which way the regions fall, that the coalition which controls the Senate may be different from the one which controls the Chamber of Deputies.

That could result in a fresh election, as a "grand coalition" of left and right would be hard to put together after such a bitter campaign, analysts say.

http://news.bbc.co.uk/2/hi/europe/4894584.stm

I hope they free the Media from the clutches of Berlusconi. There's no sense having it all in his hands. (And hopefully we'll do the same here someday)

Independent Illinois Grassroots: IllinoisDemNet.com

BBC - Italian papers express frustration with the uncertainty produced by the general election.

Centre-left leader Romano Prodi claimed victory - but his broad coalition emerged only narrowly ahead of Prime Minister Silvio Berlusconi's centre-right bloc.
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Massimo Giannini in left-of-centre La Repubblica

An Italy split down the middle, cleaved into two indomitable and irreconcilable halves, politically, culturally and socially... The trap has sprung. And it's like the poisoned sting of a scorpion on the live flesh of a country that from today will perhaps be unable to have a new government, although it will not be able to have the old one either. A perfect metaphor for this Italy... We cannot say that the Prodi era has begun. But the Berlusconi era can undoubtedly be seen to be over.
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Paolo Franchi in centrist Corriere della Sera

The trouble is that the Italy of 10 April is not just a country in which the centre-right and centre-left basically share the same consensus, and that whoever wins does so by a hair's breadth. The trouble is that since 1994, when... voters were first asked to decide which of the opposing coalitions should govern, Italy has not come one millimetre closer to having the conditions needed for a modern and civilized two-party system.

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Lodovico Festa in Berlusconi-owned Il Giornale

The 2006 vote looked like a done deal: Romano Prodi's victory looked clear-cut and secure. But, alas for the poor columnists so fanatically aligned with the Left, the people make the choices they want and perhaps don't reveal them to the exit pollsters... However the new government is formed, from tomorrow our country will be freer: this broad and united vote will act as a bastion against the contempt of the elitists who do not understand their own people.

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Virman Cusenza in centrist Il Messaggero

In what will be remembered as the night of uncertainties, we should start from the only firm point: the polls... can get it wrong. Those rock-like certainties - dressed up in figures and approximations, which for months have painted the match between Prodi and the Cavalier as a sure win for the former - crumbled over the course of a tense night that set emotions swinging and forecasts rollercoasting. The massive turnout - almost 83 per cent - played no small part in the statistical fireworks, a level we haven't seen for years and which puts us top in Europe. It confirms, if that were necessary, that these elections were deeply felt and that voters approached them anxiously.

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Federico Geremicca in centrist La Stampa

It was a night that should have brought celebration for some and disappointment for others, but that instead turned into a non-stop thriller for everyone. In short, the result was the one everyone feared the most: a "tie", with different majorities in the two branches of parliament. The outcome: an Italy split right down the middle; that much is clear. But it's also the result of a much-debated electoral law that was strongly backed by the government majority in order to curb the success of the centre-left, which until yesterday polls of all colours were predicting as inevitable.