Italy's voters offer country a divided future

It's like the 2000 US presidential election all over again - Italian-style.

In a contest that brought more than 80 percent of Italian voters to the polls, former prime minister Romano Prodi claimed victory by a mere .07 percent of the vote. But incumbent Prime Minister Silvio Berlusconi has not conceded defeat, calling for a recount of tens of thousands of votes.

With a final tally of 49.8 percent to 49.73 percent favoring Mr. Prodi's center-left coalition, Prodi has expressed confidence in his ultimate victory. But even if his win is confirmed, Italian political experts say his greatest challenges lie ahead.

Leading a government divided almost equally between left and right, Prodi could be hard-pressed to revive Italy's sagging economy - let alone undo the laws that critics say Mr. Berlusconi, a multibillionaire media tycoon, passed during his five-year term to benefit his interests.

"The future looks like an unstable government," says Franco Pavoncello, political science professor at John Cabot University in Rome. "For now, I don't think this is a government that promises to last very long."

Even within Prodi's center-left coalition, which won a narrow majority in both the upper and lower houses of parliament, there are divisions, says Professor Pavoncello. The unlikely alliance encompasses 16 parties, and includes: the Rose in Fist party, which has supported Berlusconi's conservatives in the past and advocates for rightist issues such as free markets; the Refounded Communists, who in the past have opposed Prodi on issues such as taxes and labor policies; and the Margherita party, whose values are in line with the Roman Catholic Church on such issues as stem-cell research and same-sex marriage. [Editor's note: The original version mischaracterized the Rose in Fist party.]

If any of Prodi's teetering political allies drop out of his Union coalition, it would mean an end to his majority and his term as prime minister. The economics professor and former president of the European Commission appealed to voters with a modest media presence and a tendency to quote numbers and history, says Lucia Annunziata, host of a new political talk show called "In a half-hour."

During his election campaign, which was dominated largely by Italy's weak economy, Prodi suggested remedying Italy's 7.7 percent unemployment rate by reversingBerlusconi's Biagi Law, which lowered the taxes employers must pay for part-time employees. Italian youths - much like their French counterparts - have difficulty finding full-time, permanent positions.

Prodi proposed lowering the employer taxes for permanent employees and raising taxes for temporary positions. This, explains Ms. Annunziata, made Prodi out to be the "man who will raise taxes."

Berlusconi, who between his media conglomerate and his power as prime minister directly or indirectly controls an estimated 90 percent of Italy's media, came into office on promises that he would make Italy's economy as successful as his vast business empire, which includes the ownership of Italian soccer team AC Milan. But despite being Italy's richest man, with an estimated worth of $12 billion, Berlusconi has been unable to turn around the economy, which last year registered 0 percent growth. [Editor's note: The original version incorrectly explained how Berlusconi controls an estimated 90 percent of Italy's media.]

Pavoncello, at John Cabot University, is skeptical that Prodi - who was trained at the London School of Economics and taught at Harvard - can do much better.

"If Berlusconi didn't have the strength to make the changes in the economy that were requested, then I don't think Prodi has the strength either," says Pavoncello. "Is he going to be able to repeal the Biagi law? It's a serious problem."

Annunziata says that Prodi and his coalition also have a slim chance in changing reforms that - according to his critics - Berlusconi passed in his own favor. Those included reintroducing proportional representation, which was meant to guarantee a strong conservative presence in Parliament.

Though the conservatives didn't manage to secure a majority in either the upper or lower chamber of parliament, they have only two fewer seats in the Senate. That slim margin, which remains to be confirmed by Italy's highest court, could make it difficult for Prodi to push through legislation.

While Berlusconi is one of Bush's last strong European supporters of the Iraq war, Prodi and members of his coalition are largely opposed to the war. But though Prodi said Tuesday that he would focus on Europe, not the US, Prodi said he expects to maintain good relations with the US.

Italian voter Andrea Mocasso, a young insurance agent, says she thinks Prodi's biggest challenge will be "collecting the fruits of Berlusconi's five years in office." The charismatic leader, who has been the subject of numerous corruption allegations, has said he will sail on a yacht to Tahiti if defeated. But others are skeptical his departure from politics will be so rapid. "Berlusconi is far from being out of the picture," says Annunziata.

And the charismatic leader hasn't conceded defeat yet. With the number of contested ballots exceeding the number of ballots that determined Prodi's victory, Berlusconi may yet retain Italy's top post.

• Material from the wires was used in this report.