by Miao Xiaojuan, Liu Yu

ROME, Feb.27 (Xinhua) — Italy’s major political parties, none of which won a majority in Tuesday’s parliamentary elections, have started to explore ways out of their political stalemate, also seen as a grave setback for eurozone.

Pro-reform center-left Democratic Party (PD) led by Pier Luiqi Bersani narrowly won the election in the lower house, but failed to obtain a majority in the Senate, according to the Interior Ministry. A majority in both chambers of parliament is required to form a government.

In the 315-seat Senate, Bersani is projected to get 113 seats, former Prime Minister Silvio Berlusconi’s center-right party 116, anti-austerity Beppe Grillo’s Five Star Movement 54 and outgoing Prime Minister Mario Monti 18.

Bersani, whose ideal is to ally with Monti if his party could have won two more seats, now has to face a difficult task of trying to form a “grand coalition” with disgraced Berlusconi, or striking a deal with politically inexperienced Grillo.

Berlusconi has already hinted at his willingness to negotiate with Bersani, as he said in a local TV program on Tuesday, “Italy deserves to be governed… Now we have to take time to reflect.”

At a press conference later on Tuesday, Bersani said he would be ready to seek coalition with any party that could agree on the center-left’s policy guidelines to cut government costs, reform the labor market and help Italy’s poorest.

Bersani is more likely to ally with Berlusconi than Grillo, considering Grillo’s repeated calls for leaving the eurozone and overturning Italy’s traditional parties, including Bersani’s Democratic Party.

However, experts have shown deep concerns about the broad coalition between the center-left and the center-right, predicting that such a government of sworn enemies, if formed, could be too unstable or too chaotic to last long or effectively press ahead with necessary structural reforms.

Josef Janning, an EU expert with the Berlin-based thinktank German Council on Foreign Relations, also said that, “This is not good prospect for reform politics in Italy. The country will stumble along at best, and the euro crisis is back to stay.”

“The sweeping gains of Grillo’s Five Star Movement represent a fundamental disappointment among the people on the state of public affairs,” Janning added.

Grillo’s campaign was based on pledges to clean up politics, endorsement of clean energy and rejections of the euro and high-speed rail projects.

Many voters felt upset or angry about tax increase and austerity measures imposed by the Monti government. Though its borrowing rates have fallen in financial markets, the cost to Italians has been high, with the country mired in recession and unemployment on the rise.

Meanwhile, Grillo rejected suggestions for entering a formal coalition, saying that, “It’s not time to talk of alliances… the system has already fallen.”

From now on, it may take weeks for backroom negotiations and it remains unclear if any deal can be made in the end. A failure would mean Italians would have to return to polls immediately or within months.

“It highlights that the crisis is far from over,” said Fabian Zuleeg, chief economist at the Brussels-based think tank European Policy Center, adding that much is needed to be done for generating growth and dealing with social impact in the crisis-hit country.

Italy is hugely important for the future of the euro as memories are still fresh of the crisis that pushed Italy’s borrowing costs toward unsustainably high levels and brought the eurozone to the brink of collapse in 2011.

The country’s apparent stability over the past six months has been one of the reasons that concerns over the currency have eased.

The political deadlock on Tuesday has immediately sent shock waves across the whole eurozone, with eurozone shares sinking to three-month lows on Tuesday and Italy’s 10-year bond yields rising as much as half a point to 4.86 percent, their highest since mid-December.

The Italian election gridlock also weighed on oil prices, with Brent crude oil futures falling 1.73 U.S. dollars, or 1.51 percent, to settle at 112.71 dollars a barrel and U.S. crude oil dropping 48 cents, or 0.52 percent, to settle at 92.63 dollars.

Inconclusive elections leave Italy in limbo, threaten whole eurozone – Xinhua
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