Italian intrigue

11 Apr 2006 By Hugo Dixon

Though Italy s probable next PM may be extremely weak, the corporate sector is still likely to be impacted by a new government. M&A, especially among banks, will probably revive. Telecom Italia could be squeezed. And Enel s moribund scheme to buy Suez may die.

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Romano Prodi's coalition of centreleft parties received 49.8% of the Italian vote for Parliament, according to the official count. Prime Minister Silvio Berlusconi's House of Liberty coalition gained 49.7%.

Although the gap in votes was only 0.1%, or 25,224 out of 47m votes cast, the centreleft Union group will be assigned 55% of the seats, under the country's electoral law.

The House of Liberty said it will ask for a recount.

In the Senate, which has equal legislative powers with Parliament but a more regional voting arrangement, the Berlusconi coalition won 50.2% of the vote, against 49% for the Union. That will give the House of Liberty 155 seats against 154 for the Union. However, the Union claims it has won four of the six contests for senators representing Italians living outside the country, and so will have a majority of one. In addition, there are six senators for life.

The President of Italy, Azeglio Ciampi, must nominate the prime minister. Ciampi has said that he wants to leave the choice to his successor, who is to be elected by the new parliament in May.

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