Italy's favourite comeback kid

Love him or hate him, Silvio Berlusconi is back in office for a third term, after having being written off many times by political observers and his opponents. His centre-right coalition won a handsome parliamentary majority in both the Chamber of Deputies (over 100 seats) and the Senate (30 seats), which not only transformed the country's party system but also offered a good chance of political stability over the next five years.

The new political landscape contains fewer parties in Parliament after some of the smaller political groupings were eliminated. "Now we'll govern like major western democracies, with one major party in power and one major party in opposition. With the extremists gone we'll operate extremely quickly in Parliament and get to work modernising this country," Mr Berlusconi said soon after the result was announced.

For the first time since 1948, no Communists will be represented in Parliament after they lost all their 84 seats. The Rainbow Left Alliance, which consisted of Communists and Greens, failed to meet the four per cent threshold required for representation in both the Chamber and the Senate. Had this alliance been included in the centre-left coalition headed by Walter Veltroni, it would not have needed to reach the threshold for parliamentary representation. However Mr Veltroni chose not to include these smaller left-wing parties in his bloc and ran on a platform in alliance only with the Italy of Values party. Besides the Communists and Greens, the Socialists and the right-wing Tricolour Flame also failed to get any parliamentary representation resulting in a much neater spectrum in Parliament, which should hopefully translate into much needed political stability in the country.

The blocs in Parliament now consist of the following: Centre-right Berlusconi government coalition - People of Freedom, Northern League and Movement for Autonomy; Centre-left Veltroni opposition coalition - Democratic Party and Italy of Values; Non-aligned parties - Union of the Centre (Catholic) and South Tyrolean People's Party.

If the elimination of the Communists took certain observers by surprise, perhaps the rise of the Northern League was equally surprising. The League doubled its parliamentary representation, becoming the third largest party in Italy, and Mr Berlusconi's People of Freedom Party cannot govern without its support. Although the Northern League, which wants a federal Italy and greater autonomy for the north, does not fit neatly within the left-right political spectrum, it nonetheless has right-wing anti-immigrant populist (even xenophobic) elements within it and is not particularly keen on free trade.

The fact that it almost doubled its popular vote is somewhat worrying, but Italians' frustration with the country's declining economic clout, Italy's unsure place in a globalised world, the unease many Italian voters felt about immigration, as well as a general frustration with the traditional political class could help explain the League's success.

The questions most observers are now asking is whether Mr Berlusconi has the political will to carry out much needed reform in the country, whether the Northern League led by Umberto Bossi will exert too much influence in the governing coalition and indeed whether the League will remain a loyal member of the coalition.

After all, it was the Northern League that brought down the first Berlusconi government in 1994. One also has to keep in mind that Mr Berlusconi's People of Freedom Party is actually a merger of his Forza Italia and the National Alliance headed by Gianfranco Fini, who is to become the president (Speaker) of the Chamber of Deputies. In the past, the National Alliance, which is popular in the south, and the Northern League have clashed over the latter's views on federalism.

However, the new Italian government, with its huge majority, has an opportunity to really bring about change that the country so badly needs.

The outgoing centre-left Romano Prodi administration was largely ineffective because of constant squabbling between the different parties represented in the governing coalition, which ranged from centrist Catholics to Communists, although to be fair, Prodi did manage to reduce the budget deficit significantly. The new government, nevertheless, consists of only two parties, so governing should be easier.

Mr Berlusconi's 2001-2006 government achieved little as far as major economic reforms are concerned and a lot of time was wasted by the Prime Minister when he introduced legislation to protect his business interests. He also often irritated his EU allies on a number of issues. So his record in government is not very encouraging, except for the fact that he did spend a whole term in office, a first for Italy.

Now voters have given him another chance and one hopes that he will put his large majority to good use and keep the Northern League in order. The appointment of European Commissioner Franco Frattini to be Italy's new Foreign Minister is definitely a good move and will send the right signals to Brussels.

Mr Berlusconi has said that his priorities include ending the rubbish crisis in Naples, cracking down on street crime and illegal immigration and reducing some taxes.

That is fine, but his long-term goals must be to tackle Italy's low-growth economy and lack of competitiveness, reducing the public debt and cutting the bloated public sector.

He must also reach out to the centre-left opposition, led by Walter Veltroni - who is no longer allied to the Communists, and offer to consult him on important legislation he plans to introduce, especially if this deals with structural reform.