Corrects fourth paragraph to read European Union's fourth largest economy
By Robin Pomeroy
ROME (Reuters) - Silvio Berlusconi has won his thirdItalian election with a bigger than expected swing to thecentre right, but the media magnate said it would not be easyto solve deep economic problems.
Votes were still being counted on Tuesday, but withBerlusconi's victory clear on Monday evening, centre-leftleader Walter Veltroni called the 71-year-old to concededefeat.
After two years in opposition, Berlusconi is expected toreturn to Rome from his home in northern Italy later onTuesday, although for procedural reasons he is unlikely to beappointed prime minister before early May.
A strong mandate should enable Berlusconi to push reformsthrough parliament, but many Italians are disillusioned withpolitics and doubt any government can quickly cure the ills ofthe European Union's fourth-largest economy.
"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.
He said his priorities were settling the future ofstate-controlled Alitalia, which the outgoing administrationwas struggling to privatise, and clean up a long-standinggarbage crisis in Naples.
Berlusconi's pledges include cutting taxes while reducingpublic debt, liberalising the economy and getting tough oncrime. But critics say he failed to carry out pledges torevolutionise Italy when prime minister for seven months fromApril 1994 and from 2001-2006.
SURPRISE WINNER
Pollsters' projections, based on partial results, gaveBerlusconi a 99-seat majority in the 630-member lower house andan advantage of up to 30 seats in the Senate, which has 315elected and seven lifetime senators.
That contrasts with the two-seat Senate majority that thelast government had under Romano Prodi, who resigned in January20 months into his five-year term. Berlusconi had set hissights on a 20-seat majority in the Senate.
A surprise winner in the election was Berlusconi's juniorcoalition partner, the anti-immigration Northern League whichdoubled its result over the 2006 election to around 8 percent.
That result will help strengthen Berlusconi's majority, butanalysts said it might give the League 'kingmaker' powers.
"They are going to raise their price for cooperation," saidGian Enrico Rusconi, a politics professor at Turin university.
"I don't think a Berlusconi government will be capable ofpushing through the reforms that Italy needs. The NorthernLeague is a protectionist party."
Berlusconi promised the League at least two cabinet seats.
The election win means Berlusconi, an ally of U.S.President George W. Bush, will host the third G8 summit of hiscareer when the leaders meet in Italy in 2009.
Berlusconi said he wanted Franco Frattini, currently incharge of justice and security policy at the EuropeanCommission, for foreign minister and that Gianfranco Fini, hislast foreign minister, would preside over the lower house ofparliament.
Giulio Tremonti is likely to be named economy minister,Berlusconi has said.
The big loser of the election was the left. Excluded fromVeltroni's Democratic Party, the Rainbow Left, made up ofcommunists and greens, fared so badly it may not win any seats.
With many smaller parties facing a similar fate, ChristianDemocratic chief Pierferdinando Casini said parliament may haveonly five parties, compared with some 20 last time -- a majorturnaround for Italy's traditionally fragmented politics.
(Editing by Elizabeth Piper)
For more coverage of Italy's election, check out:http://blogs.reuters.com/italia/
