Could Silvio Berlusconi rise again to scramble Italian politics?

As Italians prepare to vote next month in one of the country’s most crucial elections in decades, a prospect that may seem incredible to outsiders confronts the recession-hit country: the return of Silvio Berlusconi.

The reputation of the former prime minister has been sullied at home and abroad by sex scandals, a recent conviction for tax fraud on an epic scale, and accusations of economic mismanagement.

But the 76-year-old billionaire, who built his fortune from scratch before entering politics 20 years ago, has nevertheless managed to increase his popularity with voters in the last two weeks with a series of flamboyant, often rambunctious appearances on television current affairs shows.

Despite being embroiled in a trial in which he is accused of paying for sex with an underage escort, Mr. Berlusconi has increased his voter support from 15 percent to 17 percent since Christmas after logging more than 63 hours in prime-time TV appearances.

Coalition building

He has rebuilt a previously fractured alliance with the Northern League, a separatist, anti-immigration party based in the affluent north of Italy, which brings with it a further 5.5 percent of the vote.

The media mogul, who has been prime minister three times in the last two decades, now faces two main challengers in the election, to be held on Feb. 24-25: Pier Luigi Bersani, a former Communist who leads the leftist Democratic Party, and Mario Monti, the economics professor who has been prime minister since Berlusconi was compelled to resign in November 2011.

Despite the recent spike in support, polls suggest the election will be won not by Berlusconi’s party but by the Democratic Party, with 28 percent of the vote.

But under Italy’s complicated electoral system, Berlusconi and his allies could deny the Democratic Party a majority in the Senate, the upper house of parliament, leading to political chaos and legislative gridlock.

“That would be catastrophic,” says Roberto D’Alimonte, a politics professor from Luiss University in Rome. “It would be totally unworkable. We would probably have to have new elections within two months.”

Should he win control of the Senate, Berlusconi would be a highly destabilizing influence, analysts believe.

Italy regaining economic credibility 

Mr. Monti has clawed back Italy’s credibility internationally by implementing austerity measures and economic reforms demanded by the country’s European partners and financial markets.

Berlusconi, in contrast, has questioned whether Italy should remain in the eurozone, pinned the blame for Italy’s recession on Monti despite the fact that many of the country’s economic problems date back to his three terms in office, and has portrayed German Chancellor Angela Merkel as a Teutonic enforcer of austerity measures which are beggaring southern Europe.

He has also made extravagant promises to the electorate, saying that one of the first things he would do as prime minister would be to abolish an unpopular property tax, a move which would deny the Italian exchequer millions of euros of much-needed revenue.

Monti criticizes

Those pledges should not be believed, Monti said this week. He likened Berlusconi to the Pied Piper of Hamlin, who would lead Italians to disaster should he be reelected.

The flamboyant tycoon was “a pied piper who leads the mice to drown in the river," Monti said. Berlusconi had “already fooled Italians three times,” a reference to his terms in office.

"The sacrifices Italians have made in the last year could be squandered in three or four months if an old, reinvigorated illusionist comes to power," Monti told a current affairs show.

The comments marked Monti’s most trenchant criticism to date of his predecessor and intensified the antagonism between the two protagonists just weeks ahead of the election.

The coalition led by Berlusconi may be closing the gap with its center-left rivals, but it is the Democratic Party that is expected to win the election.

Mr. Bersani, the party’s leader, has pledged to continue the austerity measures of the Monti administration, tackle Italy’s mountain of public debt, and dig the country out of recession.

"Discipline and credibility are points we cannot turn back from," he told foreign newspapers, including The Christian Science Monitor, at a briefing at the Foreign Press Club in Rome last month.

Possible coalition deal

Bersani has talked openly of doing a deal with Monti, bringing him into a new center-left government in some capacity, possibly as economy minister.

That would please Italy’s European partners, reassure international investors, and preserve the country’s newfound credibility.

Bersani may draw his strength from the Italian left, but he is unlikely to be hamstrung by the unions that back him, analysts believe.

“He’s very strong inside the party,” says Professor D’Alimonte. “That’s not to say he can do anything he likes, but he can do a lot. If he wins convincingly, he will have leverage over the unions.”

Time for election shifts

Italy is divided into 20 regions, with the key ones to watch this election being Lombardy, the Veneto, Campania, and Sicily. “They are the equivalent of battle ground states in the US. Lombardy is the Ohio of Italy,” says D’Alimonte.

Although the Democratic Party is leading in the polls, there are still five weeks to go until the election, time enough for the strategic errors to be made and votes to be lost.

“History has shown that if there’s one bunch of people who can pluck defeat from the jaws of victory, it is the Italian left,” says one veteran foreign correspondent in Rome this week.

Meanwhile Italians got another very public reminder of Berlusconi’s tempestuous personal life on Monday, with the latest hearing in his sex trial in a court in Milan.

He is accused of abuse of office and paying for sexual relations with an underage, Moroccan-born exotic dancer, and risks a jail sentence of up to 15 years if convicted.

Judges rejected a request by Berlusconi’s lawyers to call as a defense witness Hollywood actor George Clooney.

Karima El Mahroug claims that she saw the Hollywood actor at one of the then-prime minister’s “bunga bunga” parties at his mansion outside Milan in 2010.

Mr. Clooney has denied ever going to the parties, saying he met Berlusconi on only one occasion and that was to discuss the humanitarian crisis in Darfur. Judges in the case ruled that the star's evidence would be "superfluous" to the trial.

There was a risk that the verdict in the former prime minister's trial could have been delivered on Feb. 23, a day before Italians go to the polls.

But repeated attempts by Berlusconi’s lawyers to drag out the trial paid off, with the court announcing that a verdict will now probably come on March 11 – two weeks after the elections.