Italian political quagmire lingers into holiday weekend as negotiations abound

FXstreet.com (Barcelona) - Per the latest out of the political quagmire that is the Italian Republic, former Prime Minister Silvio Berlusconi told President Giorgio Napolitano that he is ready to cooperate with rivals in the formation of a government and said he wants a voice in picking the next president. “We were and still are open to giving life to a coalition,” Berlusconi told reporters in Rome today after meeting Napolitano. “We think it’s logical that if we form a government together, a coalition government, then together we must discuss about who will be the best president of the republic.”

Indeed, Napolitano – a seasoned 87 years of age – is seeking to bridge the gap between rival factions in parliament and nominate a leader to replace Prime Minister Mario Monti. Unfortunately, this process has been at an impasse and stonewalled since the February 24-25 elections, which left no bloc with a majority in the upper house of parliament.

Napolitano took charge of the negotiations yesterday after Pier Luigi Bersani, head of the biggest parliamentary group, failed to muster a majority. Napolitano’s seven-year term ends in May, and it’s up to lawmakers to pursue and ultimately select his replacement. Italy is under acute pressure to come up with a government capable of halting the recession and protecting the country from Europe’s debt crisis. Thus far, outside spectators simply need to maintain a wait-and-see approach.

The country’s 18-month economic contraction deepened last year as Monti implemented fiscal austerity to cut the deficit and curb bond-market speculation.