Italy's Berlusconi secures clear majority

ROME (Reuters) - Silvio Berlusconi looked on Tuesday tohave secured a clear majority and streamlined parliament tohelp him push through tough decisions on Italy's strugglingeconomy in his third term as prime minister.

With almost all votes counted after a two-day election, the71-year-old media magnate's election bloc had a comfortablemajority in both houses of parliament after seeing off thechallenge of centre-left leader Walter Veltroni.

The anti-immigration Northern League party in Berlusconi'sbloc emerged as a surprise winner, and a drubbing for the farleft means Italy will not have a communist or a socialistlawmaker in parliament for the first time in recent memory.

Although many Italians are disillusioned with politics anddoubt any government can quickly cure the ills of the EuropeanUnion's fourth-largest economy, Berlusconi's strong positionshould help him win parliament's backing for difficult reforms.

"Berlusconi's margin of victory is comfortable, and allowsthe prime minister to form a stable cabinet," said UniCreditanalyst Marco Vallil.

He also said "the strength of the Northern League -- arather protectionist party -- could pose some problems when itwill be time to discuss reforms."

After two years in opposition, Berlusconi was due to returnto Rome from northern Italy on Tuesday, but for proceduralreasons is unlikely to be appointed prime minister before May.

"For Berlusconi it's a double success," wrote Corrieredella Sera columnist Massimo Franco. "Not only will he bereturning to the prime minister's office, but the novelty isthat the mandate comes after an election campaign in which hedid not promise miracles or hint at painless solutions for theeconomy."

TOUGH TIMES AHEAD

Berlusconi said on Monday he would immediately deal withthe fate of loss-making national airline Alitalia, and resolvea crisis that left thousands of tonnes on the streets ofNaples.

His campaign pledges included cutting taxes and reducingthe big public debt, liberalising the economy and getting toughon crime. But critics say he failed to carry out many of thepledges made when he was last prime minister from 2001-2006.

"The months and years ahead will be difficult and I ampreparing a government ready to last five years," Berlusconitold state television in a live phone call on Monday night.

With only votes cast abroad left to count, the results gaveBerlusconi a 101-seat majority in the 630-member lower houseand an advantage of 41 seats in the Senate, which has 315elected and seven lifetime senators.

That contrasts with the two-seat Senate majority of thecentre-left government under Romano Prodi, who quit in January20 months into his five-year term.

Milan's index of leading stocks rose slightly on Tuesdayand shares in two companies controlled by Berlusconi - Mediasetand Mondadori -- jumped at the start of trade.

Berlusconi promised the Northern League at least twocabinet seats and is expected to name its Giulio Tremonti aseconomy minister.

Franco Frattini, EU Justice and Security commissioner, isexpected to become foreign minister and Gianfranco Fini, hislast foreign minister is to head the lower house of parliament.

The big loser was the left. Excluded from Veltroni's bloc,the Rainbow Left, made up of communists and greens, fared sobadly it did not make the threshold for seats in parliament.

Other smaller parties met a similar fate.

"This framework is good news: the blackmailing power ofsmaller parties has been drastically reduced, and Italy is nowmore aligned to the experience of several other Europeancountries," said UniCredit's Valli.

(Additional reporting by Iain Rogers, Editing by TimothyHeritage)

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