Italy's Presidential Election Goes Down to the Wire

CNBC

Italy's Presidential elections on Thursday will be the biggest indication of whether the country will have to return to the polls, as a failure to agree over the next president could only cement the political deadlock further.

On Wednesday, center-left leader Pier Luigi Bersani proposed the former Senate speaker Franco Marini as a presidential candidate. Marini is also backed by the head of the center-right alliance Silvio Berlusconi and outgoing Prime Minister Mario Monti, in a show of consensus between the political groups that hasn't been seen during the last few months.

Italian lawmakers begin voting on a replacement for President Giorgio Napolitano, whose mandate expires on May 15, at 8:00 a.m. London time.

(Read More: Italy's Two Options: Hardball or Consensus )

"Marini is the candidate who is best able to attract broad support," Bersani told a meeting of parliamentarians from his Democratic Party (PD) on Wednesday, Reuters reported. "He is linked to labor and social issues and is one of those who have built up the centre-left," Bersani added.

On Tuesday, Monti and Bersani said they wanted a candidate who represented "the maximum possible convergence of opinion among the political forces on the choice of an authoritative candidate who would be able to represent national unity."

(Read More: Can 10 'Wise Men' Really Save Italy? )

Marini, however, is not without his detractors, with opposition coming from within Bersani's own PD camp from the popular mayor of Florence, Matteo Renzi. Renzi's strong influence on fellow party members could yet help prevent a Marini win. On Wednesday, Renzi told La Stampa newspaper website, "We oppose this choice. Our parliamentarians will not vote for him."

Meanwhile, the anti-establishment Five Star Movement led by comic and politician Beppe Grillo, said it would instead back a well-known Italian investigative journalist in the vote on Thursday.

(Read More: Why Italy Could Be the Next 'Bad Boy of Europe' )

The former prime minister and European Commission President Romano Prodi appeared to be one of the frontrunners for the post earlier this week. But on Tuesday, Berlusconi ruled out voting for him. Other potential candidates include former prime ministers Giuliano Amato and Massimo D'Alema and former European Union Commissioner Emma Bonino. But those candidates have all drawn objections from various political factions.

Simple in Practice

To win the presidential vote, candidates need to gain a two-third majority of 1,007 electors from thre combined houses of parliament. If that cannot be reached in the first three rounds of voting, a further round can be held in which only a simple majority is required.

However, getting Italy's disparate political groups to agree over anything has been difficult enough over the last few months since elections in February failed to give any of the major political parties an outright majority.

(Read More: Only 'Insane Person' Would Want to Run Italy: Bersani )

Since then, the country has remained effectively leaderless as politicians have failed to find common ground and form a coalition government. In the meantime, vital reforms have been on hold until a new administration can be formed.

"Once sworn in, the new President will likely try to revive talks among major parties to form a new government," Emily Nicol, an economist at Daiwa Capital Markets, said in a note on Wednesday.

"But given the current political stalemate, we continue to believe that the new President will eventually be forced to dissolve the parliament, in which case elections could be held in mid-July at the earliest (given a required 45-day period between dissolution and elections)," she added.



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