January 6, 2013 8:06 pm

Berlusconi close to Northern League pact

Italy faces the risk of no outright winner emerging from general elections next month following reports that Silvio Berlusconi, former prime minister, is close to an agreement on repairing his alliance with the rightwing Northern League.

Members of Mr Berlusconi’s centre-right People of Liberty and the Milan-based Northern League told the Financial Times on Sunday they were confident of a deal and that the parties would run together in northern Italy’s key battleground regions. Angelino Alfano, a Berlusconi loyalist and secretary of his party, said on television on Sunday that an agreement with the Northern League was “very close”.

The rift between Mr Berlusconi and Roberto Maroni, leader of the strongly euro-sceptic Northern League, remains the most critical unresolved issue that could determine the outcome of the February 24-25 election.

Opinion polls give a solid lead to the centre-left Democrats and their leftwing allies that under Italy’s complex electoral system would guarantee them a majority in the lower house. However, an alliance between Mr Berlusconi and the Northern League would avert the risk of their splitting the vote in the north and could deny the Democrats a majority in the senate.

In the event of a hung parliament, the Democrats would most likely be forced to negotiate a governing coalition with a centrist alliance led by Mario Monti, prime minister.

Such an outcome has been viewed as positive by foreign investors and heads of government hoping for a continuation of Mr Monti’s reforms and fiscal discipline. However, Pier Luigi Bersani, leader of the Democrats, might be unable to preserve his party’s unity if, as Mr Monti has indicated, the price of such a coalition would be to ditch his more leftwing allies.

Mr Berlusconi, a three-time prime minister fighting his sixth campaign at the age of 76, was due to meet Mr Maroni, his former interior minister, in Milan on Sunday night. An agreement is likely to be announced on Tuesday, officials in both parties said.

Talks between the two, which have dragged on for weeks, had been apparently close to collapse. Mr Maroni has demanded that Mr Berlusconi give up his candidacy as prime minister and to guarantee that a large slice of tax revenues from the north remain there, rather than be diverted to subsidising the weaker south.

Mr Berlusconi, insisting that a deal could be reached, said in a television interview that he could even serve as foreign or finance minister in a future coalition with the Northern League, although few politicians take that possibility seriously.

Weakened by corruption scandals that led to the resignation last year of its veteran leader Umberto Bossi, the Northern League finds itself in a serious bind.

Its grassroots supporters and some leading officials are against reviving an alliance with Mr Berlusconi. But running alone the Northern League risks annihilation in the senate where a single party must pass a national threshold of 8 per cent of votes to win a seat. Latest polls give the Northern League about 6 per cent.

Lombardy, Italy’s biggest region, has been dubbed by analysts the country’s Ohio for its battleground status. The contest there is complicated by the fact that on the same day Lombardy will also vote for a regional government following the collapse last year of the ruling People of Liberty-Northern League coalition amid corruption and mafia-related investigations by state prosecutors.

A deal between Mr Berlusconi and Mr Maroni would swing their coalition further to the populist right, setting up a contest split broadly between the pro-European Democrats and centrists on one side and euro-sceptics on the other, joined by Beppe Grillo’s resurgent anti-establishment Five Star Movement.

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