Italy likely to call elections in April

Italy likely to call an election by mid-April after the Senate speaker gave up trying to form a temporary government to end a political standoff triggered by Romano Prodi's resignation as prime minister.

Center-right leader Silvio Berlusconi wants an early election because he is riding high in opinion polls and hopes to return to the office of prime minister he has held twice before.

Many say another government elected under current electoral rules will prove just as unstable as Prodi's, and some worry another free-spending Berlusconi government will undo the center-left's work on cutting the budget deficit.

Senate Franco Marini, who had been asked by Italian President Giorgio Napolitano to seek cross-party backing for an interim administration to reform the electoral system ahead of an election, said on Monday there was no such support.

"I could not find a significant majority on a precise electoral reform," Marini said as he left Napolitano's office after handing back his mandate on forming a new government.

Napolitano to have little choice now but to dissolve parliament and call an election. He could theoretically ask Marini or someone else to try again but that is considered unlikely as the center-right is sure to reject further advances.

"We affirmed that the best thing for the country is to immediately give Italy a government legitimated by a popular vote," Berlusconi told reporters after meeting with Marini.

He said he hoped to win election, then start negotiating about any changes.

"We hope ... the head of state will call elections immediately because the country quickly needs an efficient government to solve its grave problems," Berlusconi said.

Business have pleaded for stability since Italy's 61st post-war government collapsed last month after Prodi lost a confidence vote in parliament following defections from his center-left coalition. He had been in power for 20 months.

Data shown Italian business confidence hitting its lowest since the end of 2005 -- when Berlusconi was in power and the economy was stagnating -- and a think-tank has trimmed its growth forecast for this year to 0.9 percent from 1.4 percent.

Employers' head Luca Cordero di Montezemolo, who favors electoral reform, urged an end to "years of rivalry and ungovernability so that we can guarantee growth because we grow less than any other European country."

Rome Walter Veltroni, the probable prime ministerial candidate on the center left, continued to push for an interim government tasked with fixing the law, as have the nation's business and religious groups.

"I think this risks being a missed opportunity for Italian politics, rushing toward elections with a flawed law," he said.

Prodi after constant arguing in his nine-party coalition came to a head with the defection of a small Catholic party that erased his tiny majority in the Senate.

His government's inherent fragility resulted largely from voting rules introduced by Berlusconi in 2005. The system, which rewards small parties in coalitions, was regarded by critics as a "poison pill" for Prodi, who won the 2006 election by the slimmest margin in Italy's modern history.

Berlusconi held talks with Veltroni, head of the main center-left Democratic Party (PD), about possible changes.

But when Prodi's government collapsed, Berlusconi -- the only prime minister to have served a full five-year term in post-war Italy -- changed his tune.

Veltroni, 52, is one of the younger faces in Italian politics and has said he wants the PD to run alone, without its bickering Catholic and communist allies -- something which might be tricky without electoral reform.