Scenarios for Italy crisis, uncertainty could drag on

Rome: Italy's political crisis, already a month old, could drag on for at least several more weeks and is now inextricably tied up with the vote for a successor to President Giorgio Napolitano, the man in charge of finding a solution.

An election on Feb 24-25 pushed Italy into limbo with a huge protest vote for the populist 5-Star Movement splitting parliament three ways, wrecking the established bipolar system and leaving no group with enough support to rule alone.

Under the constitution, it is up to the president to sort out the mess, but Napolitano's own 7-year term ends in six weeks and his successor must be elected by the divided new parliament.

Centre-left leader Pier Luigi Bersani has a majority in the lower house but not in the Senate and has rebuffed repeated overtures from centre-right leader Silvio Berlusconi to form a grand coalition with him. In turn, 5-Star leader Beppe Grillo rejects Bersani's attempt to form an alliance with the left.

Hopes of a solution now appear to depend on Berlusconi and Bersani reaching some kind of deal over the presidential election, which will begin on April 18. Any deal could clear the way for a government. Otherwise Italy will head for elections, possibly as soon as June-July but more likely in the autumn.

Although the political landscape changes every day, the following are the scenarios for the next few weeks:

NO ELECTIONS, BUT NEW GOVERNMENT

- Napolitano, 87, whose mandate runs out on May 15, has appointed two groups of experts to try to find common ground for a government platform that all sides can agree. This essentially has frozen the situation until late next week, which brings it close to the start of the presidential election.

- Berlusconi, 76, is desperate for a friendly face in the Quirinale presidential palace, saying recent heads of state have all been from the left and it is the turn of Italy's right. However, a key consideration for him may also be obtaining some protection, including possibly a presidential pardon, if he is convicted in two pending legal cases - one on charges of paying for sex with a minor, another for tax fraud.

- Bersani, 61, who faces a strong party leadership challenge from the youthful mayor of Florence, Matteo Renzi, appears ready to negotiate with Berlusconi on a non-partisan figure in the Quirinale in exchange for the right's acquiescence in parliament to a minority centre-left government. He refuses Berlusconi's demand to join together in a coalition, fearing this will split the centre-left and gift millions of its voters to Grillo, who took an unprecedented 25 percent in the election.

- Renzi, and his supporters on the right of Bersani's grouping, say an outright governing alliance with Berlusconi is the only way to avoid an early election.

- If a government is formed, it would likely last as little as 6-12 months, but could pass some essential, widely agreed reforms, notably the repeal of a dysfunctional electoral law which was a major cause of the current impasse. It would also be able to perhaps pass pro-growth measures to start reversing Italy's grave recession.

- If a political deal fails, there is still a slight possibility of a technocrat government, sponsored by the president, like the outgoing administration of Mario Monti. But that is widely opposed and Napolitano is very reluctant to bequeath his choice of prime minister to his successor.

NO AGREEMENT, SNAP ELECTIONS

All ways out of the crisis seem to revolve around a broad agreement between Berlusconi and Bersani. So far, despite some tentative signs of dissent inside his 5-Star Movement, there seems little chance of a break from Grillo's refusal to vote confidence in any government led by the traditional parties.

- If Berlusconi and Bersani do not agree on a president, then the latter could join with Grillo in electing a figure seen as hostile to the billionaire media magnate. Centre-left former prime minister Romano Prodi is increasingly being mentioned. After three votes a simple majority of the combined houses of parliament plus representatives of the regions is enough to elect a new president, so Bersani plus Grillo could do this.

- The ball would then go into the new president's court. He might briefly try to oversee the formation of a new government but a bellicose break with Berlusconi by Bersani would make that even less likely.

- Otherwise the new head of state would be obliged to dissolve the new parliament and call elections, despite the fact that business leaders, economists and many of the public think this would be a disaster for the economy by delaying decisive action. It has also been strongly opposed by Napolitano.

- If Berlusconi fails to get a deal for the Quirinale he may believe his best course is an election, with latest opinion polls suggesting he could win at least the lower house, boosting his chances of personal protection against legal cases.

- Some people, including Berlusconi's People of Freedom (PDL) party and Renzi believe an election can be called by June. However experts say this will soon be technically impossible and it would have to be forced into July - a time during the summer holidays which would be deeply unpopular and could increase uncertainty by lowering turnout.

- More likely is an election in the autumn, probably October. But such a vote is likely to repeat the deadlock of the February poll if held under current rules. The despised electoral law, known as the "pigsty", gives a comfortable majority in the lower house to any bloc that wins, even by a tiny majority, as Bersani's did in February.

But the Senate is decided on a regional basis, making it very likely that a new government would fall short of a majority there - again, like Bersani. A confidence vote is required in both houses for a new government to take office.

- The calling of elections is likely to accelerate an attempt by the market-friendly Renzi to topple Bersani, a colourless former communist and uninspiring campaigner who threw away a 10-point opinion-poll lead in the February election.

Renzi, 38, a dynamic campaigner, could be a game-changer by robbing both Berlusconi and Grillo of votes. However his leadership might also fatally divide the centre-left, causing its left wing to break away, and weakening it in an election.

But Renzi could stay in play if an election is delayed for longer, giving him more time to overthrow Bersani.