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Silvio Berlusconi says he has agreed on a pact with the rightwing Northern League

This could lead to no outright winner emerging from the country's parliamentary elections

Berlusconi resigned in November 2011 to make way for the appointment of Mario Monti

(Financial Times) —  

Italy’s former prime minister Silvio Berlusconi says he has agreed on an electoral pact with the rightwing Northern League, a development that could lead to no outright winner emerging from the country’s parliamentary elections next month.

“Habeamus papam,” Mr Berlusconi said in a radio interview, using the Latin for “we have a pope”, referring to weeks of hard negotiations with the Milan-based Northern League. He said he had signed an agreement with Roberto Maroni.

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According to opinion polls, Mr Berlusconi’s rivals – the centre-left Democrats and their leftwing allies – are heading for victory in the February 24-25 elections.

Under Italy’s complex electoral system, the winning party or coalition at a national level is guaranteed a majority in the lower house.

However, bonus seats in the senate are awarded on a regional basis. An alliance between Mr Berlusconi’s centre-right People of Liberty and the Northern League would avoid splitting their vote in two key battleground regions in the north and could deny the Democrats an outright majority in the upper house.

Mr Berlusconi’s shaky relationship with the Northern League dates back to the first of his three election victories in 1994. Their latest divorce came in November 2011 when Mr Berlusconi resigned under internal pressures and from financial markets to make way for the appointment of Mario Monti as technocrat prime minister.

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Outlining the details of the agreement reached last night, Mr Berlusconi said he would be leader of their coalition of “moderates”. Mr Maroni, head of the Northern League and former interior minister, would be joint candidate for the governorship of the region of Lombardy which holds elections on the same day as the national polls.

Mr Maroni had demanded that Mr Berlusconi step back as the coalition’s candidate for prime minister. Mr Berlusconi said in the event of their victory he could be willing to serve as finance minister, and he proposed Angelino Alfano, his party secretary, as prime minister.

Latest opinion polls show Mr Berlusconi and the Northern League gaining ground on the centre-left coalition, but with around 28 per cent of the vote they are still about 14 points adrift of their rivals. Mr Monti’s hastily formed alliance of centrist groups is polling around 14 to 15 per cent.

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In the event of a hung parliament, the Democrats would most likely be forced to negotiate a governing coalition with Mr Monti.

Such an outcome has been viewed as positive by foreign investors and heads of government hoping for continuation of Mr Monti’s reforms and fiscal discipline. But the risk remains that Pier Luigi Bersani, leader of the Democrats, would 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.

Italy’s elections are turning into a four-way fight, with the anti-establishment Five Star Movement led by Beppe Grillo, a comedian-activist, polling around 15 per cent.

But the key battle could prove to be that between the sober and professorial Mr Monti and Mr Berlusconi, the 76-year-old billionaire media mogul, as they effectively challenge each other for leadership of Italy’s centre-right.

In his recent media blitz, Mr Berlusconi has devoted most of his efforts to attacking Mr Monti’s record, as well as the “immorality” of his rival’s decision to use his previous neutrality as technocrat prime minister to launch into politics. Mr Monti’s dry riposte has been to remind Italians that Mr Berlusconi had invited him last month to lead a coalition of moderates, but that he had refused.

The reforged alliance between Mr Berlusconi and the Northern League is likely to propel their coalition further to the populist right, with both parties critical of the austerity policies they see forced on weaker members of the eurozone by a dominant Germany.