Berlusconi sweeps back to power

Silvio Berlusconi has won his third Italian election with a bigger than expected swing to the centre right, but the media magnate said it would not be easy to solve deep economic problems.

With Berlusconi's victory clear on Monday, centre-left leader Walter Veltroni called the 71-year-old to concede defeat. After two years in opposition, Mr Berlusconi is expected to return to Rome from his home in northern Italy, although for procedural reasons he is unlikely to be appointed prime minister before early May.

"Berlusconi's triumph" was the headline in Italy's leading Corriere della Sera. La Stampa said: "Berlusconi's Third Time".

A strong mandate should enable Mr Berlusconi to push reforms through Parliament, but many Italians are disillusioned with politics and doubt any government can quickly cure the ills of the EU's fourth-largest economy.

"The months and years ahead will be difficult and I am preparing a government ready to last five years," Mr Berlusconi told state television in a live phonecall on Monday night.

He said his priorities were settling the future of state-controlled Alitalia, which the outgoing administration was struggling to privatise, and clean up a long-standing garbage crisis in Naples.

Mr Berlusconi's pledges include cutting taxes while reducing public debt, liberalising the economy and getting tough on crime. But critics say he failed to carry out pledges to revolutionise Italy when he was prime minister for seven months from April 1994 and from 2001 to 2006. A surprise winner in the election was Mr Berlusconi's junior coalition partner, the anti-immigration Northern League, which doubled its result over the 2006 election to around eight per cent.

That result will help strengthen Mr Berlusconi's majority, but analysts said it might give the League 'kingmaker' powers.

"They are going to raise their price for cooperation," said Gian Enrico Rusconi, a politics professor at Turin university.

"I don't think a Berlusconi government will be capable of pushing through the reforms that Italy needs. The Northern League is a protectionist party."

Mr Berlusconi promised the League at least two cabinet seats. The election win means Mr Berlusconi, an ally of US President George W. Bush, will host the third G8 summit of his career when the leaders meet in Italy in 2009.

Mr Berlusconi said he wanted Franco Frattini, currently in charge of justice and security policy at the European Commission, for foreign minister and that Gianfranco Fini, his last foreign minister, would preside over the lower house of Parliament.

Giulio Tremonti is likely to be named economy minister, Mr Berlusconi has said.

The big loser was the left. Excluded from Veltroni's Democratic Party, the Rainbow Left, made up of communists and greens, fared so badly it is not seen winning any seats.

With many smaller parties facing a similar fate, Christian Democratic chief Pierferdinando Casini said Parliament may have only five parties, compared with some 20 last time - a major turnaround for Italy's traditionally- fragmented politics.

Election unlikely to refresh faltering Italy

Italy, with its failing airline, fractured infrastructure and faltering soccer teams, desperately needs change and innovation to keep pace with Europe, but last weekend's general election is unlikely to bring either.

On the front page of leading newspaper Corriere della Sera, political professor Giovanni Sartori advised readers to "Vote lack of confidence, constructively", - with opposing votes in the two chambers which would negate each other.

And in rival daily La Stampa sociologist Luca Ricolfi advised voters not to vote at all, which until recently would have been taboo in a country where the turnout regularly outstrips most developed countries.

That frustration finds fuel in recent crises where politicians are seen as corrupt and incompetent, more concerned with concealing crises than resolving them, graphically symbolised by the trash piled on the streets of Naples and toxins permeating the country's prized mozzarella cheese.

"Anything politicians touch, it's the kiss of death, the opposite of King Midas," said university professor Carlo Alberto Carnevale-Maffe.

Italy's one-time flagship airline Alitalia is near bankruptcy and the government is looking to European neighbour Air France-KLM to rescue it.

A long-promised bridge connecting the mainland to Sicily has never got off the ground, the road and rail system lack investment and construction in city centres seems to focus on car parks.

Milan, the country's financial capital, has just been appointed host of the Universal Exhibition in 2015 but will need more than €4 billion in investments to meet the challenge.

The economy has lagged its eurozone partners for at least a decade and this week the International Monetary Fund (IMF) cut its forecast for Italy's growth this year to just 0.3 per cent against a 1.4 per cent rise for the eurozone.

Spain, which Italians see as their poor relation in Europe, is seen boosting its wealth just short of three per cent this year.

Summing up the sense of malaise, even the country's soccer teams have failed to make the grade this year, with no Italian squads in the final four of the European Champions League.

One of the few areas where Italy is above average among countries in the Organisation for Economic Cooperation and Development (OECD) is for longevity, with an average 79.7 years life expectancy.

But that goes hand in hand with a static, risk-averse society where few people reach positions of power before their 50s.

The country's biggest insurer Assicurazioni Generali, known for its conservative strategy, is run by an 83-year-old. Car maker Fiat was ruled by the patriarchal Gianni Agnelli for decades before his death in 2003 aged 81. Outgoing Prime Minister Romano Prodi is 68, Mr Berlusconi himself is 71.

"Political fragmentation could once again dilute the incisiveness and depth of reforms that Italy urgently needs," said Morgan Stanley analysts in a research note.

Factbox - Next steps after Italian election

Following are the key events expected in the weeks ahead.

April 29 - The new Parliament meets for the first time. It is expected to spend a few days choosing a speaker of the lower house and president of the Senate, and selecting committee heads.

May - President Giorgio Napolitano is expected to start meetings with parliamentary heads and party chiefs to verify that Mr Berlusconi has a majority. Since the election result seems clear, this could move quickly.

May - probably week of May 5 - Napolitano will ask Mr Berlusconi to present his cabinet list for approval. He has the right to reject ministers.

Probably by May 9 - Mr Berlusconi and ministers go to the presidential palace for a swearing-in ceremony. Until this moment, outgoing Prime Minister Romano Prodi stays in power in a caretaker capacity.