MNI EXCLUSIVE: Italy Gears Up For Coalition Horse Trading

--Appointment Of Next Senate, Lower House Leaders A 'Testing Ground'

--If No Early Deal, High Likelihood Of Second Vote

By Silvia Marchetti

     LONDON (MNI) - Italy's political parties are gearing up for preliminary

coalition talks this week, as parliament returns after the election and

exploratory discussions are likely to get underway, MNI understands.

     The process of forming a new government will be long and complex, as no

single party or aligned bloc has secured the necessary majority to govern alone.

The two frontrunners -- the centre-right coalition and the 5 Star Movement --

are looking at possible ways to form a new cabinet

     "Parliament will open soon, with a fresh outlook reflecting post-vote

Italy. The first testing ground to see if any potential alliance is possible

will be the appointments, starting from March 23, of party leaders and of the

two presidents of the Senate and Lower House," Giovanni Orsina, director at

Rome's LUISS University, told MNI. 

     "It won't be an easy task, but it will give us an idea of what's ahead. If

parties fail to agree on key parliamentary figures, then all talks will drown

even before starting. Were no solid alliances to rise with the gaol of paving

way to a new government, Italy will face a second vote in the next few months,"

warned Orsina. 

     --MIXED MESSAGES

     Both 5 Star and Lega, who led the centre-right bloc, are interested in

striking alliances. The Democrats, struggling in the wake of their heavy defeat

and the resignation of party leader and former premier Matteo Renzi, are sending

out mixed messages.

     Orsina pointed-out that the election of the next Senate president, assuming

there's a deal amongst parties, could be quick. But in the Lower House, it could

drag on for days given the more complex system requiring a greater number of

votes. 

     "If all goes well, we could have a new functioning parliament by early

April," he observed, which does not, however, automatically translate into

having a new government. 

     Once parliamentary leaders have been appointed, outgoing premier Paolo

Gentiloni would step-down from office and a round of party talks would kick-off

at the presidential palace, with the head of state, President Sergio Mattarella,

meeting all party leaders and vetting possible alliances. 

     --MATTARELLA'S BALL GAME

     Talks could drag on for at least a week, with two possible outcomes. If

parties have already struck a deal and Mattarella believes there are grounds to

form a new government, he will appoint the next prime minister. But if not, the

head of state could decide he needs more time to weigh all possibilities and

would thus name an 'explorer' to continue with vetting operations. 

     Both 5 Star and Lega claim to have the prevailing position, making their

role crucial both in appointing the new parliamentary leaders and, above all, in

the process of government formation. 

     Lega have, to date at least, turned down all options of allying with 5

Star, a solution that would have unblocked the stalemate but lead to a populist

cabinet. 

     "Lega leader Matteo Salvini, now that he has become the leader of the

centre-right coalition, will never abandon this privileged role while the

Democrats, lost after the defeat and facing internal woes, don't know exactly

where they stand," LUISS's Orsina said. 

     Democrat sources close to Renzi told MNI recently (Mar 9 - MNI EXCLUSIVE:

Italy Dems To Side Step Alliance With 5-Star: Offcls) that the party will be in

opposition, where voters have placed it. But other party officials, not close to

Renzi's camp, argue that there could be room for manoeuvre to offer "external

support" to a new cabinet. 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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