Italy to vote on March 4, with hung parliament feared

ROME (Reuters) – Italy will vote on March 4 in an election expected to produce a hung parliament, instability and possible market turbulence in the euro zone’s third largest economy.

Prime Minister Paolo Gentiloni’s cabinet set the date of the vote after the president dissolved parliament on Thursday, formally opening an election campaign which in practice has already been raging bitterly for weeks.

With opinion polls suggesting no one will win a parliamentary majority, Gentiloni said he would remain in office and ensure continuity until a new administration was in place.

As things stand, a center-right alliance around Silvio Berlusconi’s Forza Italia (Go Italy!) looks set to take the largest number of seats – potentially catapulting the 81-year-old four-times premier back to center stage even though he cannot become prime minister due to a tax fraud conviction.

Gentiloni told reporters at the end of his one-year spell in power that Italy should not fear uncertainty, noting that it was now common to many European countries.

“We mustn’t dramatize the risk of instability, we are quite inoculated against it,” he said, in reference to Italy’s frequent changes of government, adding that elsewhere in Europe there has been “an Italianisation of political systems”.

Germany is locked in talks to produce a new government after inconclusive elections, while Spain and Portugal have minority governments and Britain is in tangled negotiations over its exit from the European Union.

Italy schedules election on March 4 2018: government source

“This is the message the PD has to give, and if it does so I think it will regain support,” he said.

Although the presidency is usually a mainly ceremonial role, President Sergio Mattarella is likely to become a central figure if the election produces no clear winner.

He is expected to ask the center right to try to form a government if, as expected it is the largest coalition. But if it cannot muster a majority then the second chance may fall to the maverick 5-Star if it is still the largest party.

Its leader Luigi Di Maio said on Thursday he would work for a policy deal with other parties after the election, shifting away from the movement’s previous refusal to form alliances.