By Eric J. Lyman
ROME, March 18 (Xinhua) -- Italy's controversial three-time prime minister, Silvio Berlusconi, on Monday offered rival his support in forming a new government with center-left leader Pier Luigi Bersani as prime minister in return for allowing Berlusconi's allies to select the country's next president, and Berlusconi promised protests in the street if his offer is rebuffed.
The ongoing deadlock in Italy has added to investor jitters at a time when they are already spooked by slow economic growth across Europe, and the European Union announced a 10-billion-euro bailout for Cyprus on Monday.
Berlusconi's move comes just two days after parliament elected its leadership, with anti-Mafia prosecutor Pietro Grasso chosen as head of the Senate and Laura Boldrini, a former press office head for the United Nations High Commissioner for Refugees picked to head the lower house. Both Gross and Boldrini are members of Bersani's coalition and Berlusconi critics.
But Bersani is still having a hard time cobbling together the Senate majority he needs to form a government without the support of either Berlusconi or Beppe Grillo, a comedian and activist. Strong support for the populist campaigns of Berlusconi and Grillo prevented Bersani from earning an outright majority in the Senate after last month's national vote.
Bersani has made offers to form a coalition government with Grillo's forces, but they have been refused. Bersani, a long-time Berlusconi opponent, has refused to discuss a deal with the billionaire media tycoon.
Despite the impasse, Italian President Giorgio Napolitano is expected to start consultations with major parties on Wednesday in order to determine if it will be possible to form a majority government.
Bersani vows to form a minority government if he fails to strike a deal with Grillo's allies. That would mean he would seek ad hoc support from individual lawmakers -- whether backers of Berlusconi, Grillo, incumbent Prime Minister Mario Monti, or independent -- each time legislation is voted on.
But the election of Grosso as Senate president already shows how perilous that path could prove to be: Grasso's election was done with the support of several Grillo lawmakers sparking demands Monday that those parliamentarians resign.
Grillo, who wants to orchestrate the collapse of traditional political parties in Italy, ordered his lawmakers to turn in blank ballots on the question of parliamentary leadership.
Berlusconi's offer to Bersani was to throw his coalition's support behind a new government, allowing Bersani to become prime minister. In return, Bersani would allow Berlusconi and his allies select Italy's next president before Napolitano's term expires May 15.
In Italy, the president is a ceremonial role in most circumstances, but it includes some real power, including decisions to the fate of governments when their majority is small.
Though Bersani had not officially rejected Berlusconi's offer as of late Monday, it appears likely he will do so. If he does, Berlusconi promises national protests.
As Italy's political turmoil continues, it is an increased drag for the country's already fragile economy, which has seen the government's borrowing costs rise dramatically since last month's elections, while stock prices -- particularly banking stocks -- have fallen, along with consumer confidence.
If the response to the EU bailout in Cyprus is any indication, it could get much worse. Following Greece, Ireland, Portugal and Spain, Cyprus is the fifth country in the 17-nation euro zone to require bailout money.
The news sent ripples across Europe and even resulted in a weak opening to the New York Stock Exchange Monday. Italy's economy is nearly twice as large as the five sick euro-zone economies combined, and if the debt crisis starts to put pressure on Italy as it did in 2011, it is unlikely that whatever fractured government emerges from the current deadlock will be equipped to confront it.