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Berlusconi, again kingmaker in Italy, says bid to finally form government should succeed

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People of Freedom party leader Silvio Berlusconi meets journalists after talks with Italian President Giorgio Napolitano, in Rome's Quirinale presidential palace, Tuesday, April 23, 2013. President Giorgio Napolitano launches his unprecedented second term with accelerated consultations aimed at forming a new government. Napolitano, 87, has urged parties to quickly agree on a new government, chastising them for treating the notion of a political alliance as a "horror" and urging them to face the reality that no party in Feb. 24-25 elections won control of both houses. (AP Photo/Gregorio Borgia) (The Associated Press)

Former Italian Premier Silvio Berlusconi predicted Friday that Italy would succeed in forming a governing coalition out of bitterly rival blocs including his own, savoring the prospects of a political comeback for himself and his conservative party.

Once virtually counted out as a political power after giving up the premiership in the face of Italy's economic crisis, the billionaire business baron now appears be Italy's kingmaker.

Berlusconi gave his upbeat assessment on the prospects for a government Friday to TgCom24, part of his media empire, predicting that there would be a "good outcome" for coalition talks.

The economically stagnant nation has been struggling for two months to form a new government after inconclusive national elections in which Berlusconi's party finished second.

Berlusconi was expected to meet shortly with Premier-designate Enrico Letta, after returning overnight from a trip to the United States for the dedication of George W. Bush's presidential library.

Letta's Democratic Party came in first in the balloting, but it fractured after failing to win control of both parliamentary chambers.

Letta held talks for two hours Friday morning with President Giorgio Napolitano, who tapped him earlier in the week to attempt to build bridges in the polarized Parliament.

"There's a very positive attitude by the premier-designate" toward the negotiations, Berlusconi said.

Reflecting that optimism, an auction of six-month Treasury bonds went well, according to data from Italy's central bank Friday. The interest rate dropped from 0.83 percent to 0.50 percent from the previous month, as €8 billion ($10.5 billion) in bonds were auctioned.

The third major bloc in Parliament is an aggressive political newcomer, the anti-establishment 5 Star Movement, galvanized by caustic comic Beppe Grillo. Grillo's movement has refused to back the established parties in a coalition, saying it's time for change.

After meeting with leaders of all of Parliament's parties Thursday, the premier-designate expressed cautious optimism.

A major obstacle has been a highly unpopular property tax that Berlusconi vowed to abolish if he regained power. The tax was created by Berlusconi's replacement, Premier Mario Monti, as a key revenue raiser in his bid to prevent Italy from sliding deeper into the euro zone's sovereign debt crisis.

Letta, who needs Monti's small centrist forces to create the coalition, conferred with the caretaker premier Friday morning. Monti's party has indicated the property tax could be tweaked.

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