Italy's premier-designate short of securing support for a ruling coalition, cites difficulties

Italy's premier-designate, Enrico Letta, said candidly Thursday he is still short of securing support for a ruling coalition after Silvio Berlusconi's forces insisted that the media mogul's populist economic policies dominate the would-be government's agenda.

"The difficulties are there," Letta acknowledged during talks, broadcast live on TV, with one of several parliamentary groups he met with during the day in his uphill quest to nail down a deal that could bring archrivals into a ruling coalition strong enough to revive growth in recession-afflicted Italy.

He added he hasn't yet decided if can succeed a day after Italy's president asked him to try to bring the forces in a highly polarized Parliament together in a grand coalition, two months after inconclusive elections left the nation in political gridlock.

"We are crossing uncharted territory in a unique and difficult situation," Letta said, referring to the election results that found bitter rivals — his center-Left Democratic Party and Berlusconi's center-right alliance — short of the seats needed to effectively govern without each other.

The Democratic Party whip in the Chamber of Deputies, Roberto Speranza, said Letta would need "extra time" to work out a coalition agreement, but stressed the premier-designate's determination to succeed.

"This country, more than ever before, cannot afford to wait" for a new government, Speranza told reporters just after he met with Letta on Thursday evening.

If Letta fails, that could mean fresh, and perhaps again, inconclusive elections for the country, a prospect sure to spook financial markets anxious for economic reform to heal Italy's shaky finances and revive growth in the eurozone's No. 3 economy.

Letta voiced his reservations about whether he can form a government after a two-hour meeting with top aides to Berlusconi, the former three-time premier who was in Texas for the dedication of the library of his friend, George W. Bush, the former U.S. president.

Berlusconi's No. 2 Angelino Alfano said some progress was made toward an agreement on joining Letta's Democratic Party in a coalition.

But Alfano stressed that whether the coalition is born depends entirely on whether Letta will embrace Berlusconi's economic recipe.

"There are still some kinks to smooth out," Alfano told reporters after huddling with Letta. "The path has been laid out, and that involves putting the economic crisis at the center" of talks. "All revolves around that," Alfano said.

He said more "contacts" between the rival blocs were planned.

Berlusconi is adamant about abolishing a property tax some consider crucial to Italy's surviving the eurozone debt crisis. In his electoral comeback bid, Berlusconi made eliminating the tax and refunding to citizens the amount they paid last year his main campaign pledge.

The tax was instituted by caretaker Premier Mario Monti, who made the measure's revenue a key way to shore up Italy's finances and keep the country from succumbing to a Greece-style sovereign debt crisis.

Monti, an internationally respected economist, took Berlusconi's place as premier as the financial picture deteriorated, and his small but influential centrist party will be needed by Letta for a coalition.

In an apparently hasty bid to placate Berlusconi, a senator in Monti's party indicated that the property tax measure could be tweaked.

"It's useless to make an ideological clash" over the tax, Senator Linda Lanzillotta said in a statement.

Alfano said Berlusconi also insisted on eliminating payroll taxes for companies which hire young workers to reduce soaring youth unemployment. Monti had focused heavily on increasing tax revenues.

Failing to form a government would further delay sorely needed economic and political reforms in a country where widespread corruption discourages investment, recession has devastated the job market and Italians are fed up with ever-higher taxes as the price for surviving the eurozone-debt crisis.

Letta, 46, a veteran lawmaker highly regarded by Italy's politically influential pro-Vatican centrists, needs to secure wide and reliable support in Parliament for an agenda that would balance measures for both austerity and growth.

Meanwhile, Berlusconi, who has been premier three times, is intent on furthering his political comeback while protecting his business interests and himself in various criminal trials.

Roberto Maroni, a Berlusconi ally, said his Northern League forces won't join the government. He told reporters that Letta was "neither optimistic nor pessimistic" about his prospects to form a government.

Letta is very "aware that if its attempt fails, we go to early elections," Maroni said.

It was with Letta's meeting with lawmakers from the anti-establishment, grassroots 5 Star Movement, which made a stunningly successful first foray into national politics, that the premier-designate acknowledged uncertainty about his ability to form a coalition.

Parliament's third-largest bloc, the movement, led by comic-turned-political agitator Beppe Grillo, won't join a government, but might support Letta on some measures.

Letta's publicly squabbling party splintered after it won control of the Chamber of Deputies, but not of the Senate. Not only must the premier-designate form a government, he must stop his own party's implosion to ensure its lawmakers will close ranks on the government's reform platform.

Democratic Party chief Pier Luigi Bersani resigned last week after back-to-back humiliating failures. Although his party was the largest vote-getter in February's election, he failed to line up a coalition government after President Giorgio Napolitano asked him to try to do so. Next, traitors in his own party sabotaged his high-profile choice, Romano Prodi, a former European Commission president, to succeed Napolitano, whose term in office was expiring.

Bersani wound up pleading with Napolitano to serve an unprecedented second term as head of state to help squabbling politicians get down to the business of giving Italy a new government.

Meanwhile, Italian media carried details of the latest corruption scandal to sully the nation's political class.

In the southern region of Basilicata, the governor resigned after a probe exposed abuses and fraud in expense accounts by local officials, including one who submitted reimbursement claims for dinner in restaurants in three different cities on the same day.