May 2, 2006

Countdown starts toward new Italy government

By Philip Pullella

ROME (Reuters) - Italian Prime Minister Silvio Berlusconi
was expected to hand in his resignation on Tuesday after losing
last month's election, starting the countdown to the formation
of a new government headed by Romano Prodi.

Berlusconi, who had contested the result of the April 9-10
poll, was scheduled to see President Carlo Azeglio Ciampi in
the early afternoon following a cabinet meeting.

His resignation is a formality after the new parliament
elected speakers at the weekend for the lower and upper houses
who are both from the centre-left coalition, showing Prodi can
control the two chambers with his slim majority.

"Democracy is moving forward, sometimes a little bit slowly
but it is moving forward," Prodi told Reuters television on
Tuesday. "This is an obvious step, it is an obligation and it
is necessary."

It will be up to 85-year-old Ciampi to decide whether to
start consultations this week on the formation of a government,
or to delay the move until after parliament elects a new head
of state later this month.

Ciampi, whose mandate expires on May 18, has always said
his successor should oversee the transition, but he faces huge
pressure to do it himself with credit rating agencies pushing
Italy to take swift action over its wayward public finances.

If Ciampi bows to the pressure, Italy could have a
government led by Prodi in place by the end of the week.

Prodi has promised to have a cabinet team ready by then in
case Ciampi gives him the green light, and on Tuesday he said
he hoped "the lack of a government does not go on for long."

Berlusconi will continue as prime minister in a caretaker
capacity until the new government is installed.

Prodi's coalition, ranging from old school communists to
Roman Catholic moderates, won the April election by the
smallest margin in modern Italian history.

Berlusconi denounced widespread irregularities in the vote,
but Italy's supreme court sanctioned the count and said any
further complaints should be reviewed by the new parliament.

Prodi, a former European Commission president, has stressed
that Italy could give the world and markets a sign of stability
if his government gets down to business quickly.

If Ciampi, a former central bank governor, refuses to
oversee the transition then parliament might decide to speed up
the election of the new president, originally scheduled for May
12-13, and thereby hasten the creation of a new administration.

Speakers of both houses of parliament were elected on
Saturday. But the four ballots needed in the upper house Senate
underscored the difficulties Prodi could have with his slim
majority there.