from TheTelegraph Website
Comedian Beppe Grillo repeated his vow to “bring down the old system”.
Italian officials say the Bank of Italy’s governor Ignazio Visco is front-runner to take over as premier despite warnings that this will be seen as an elitist ploy. It is far from clear whether the Democrats (Pd) in charge of the lower house will back the idea.
The plans amount to a near replica of the outgoing team of Mario Monti, though one greatly weakened by the earthquake upset in the elections a week ago. Almost 57% of the vote went to groups that vowed to tear up the EU-imposed austerity agenda.
Stefano Fassina, the Pd economics chief, said his party is vehemently opposed to “any form of technocrat government, new or old”, insisting that the election result must be respected.
Mr Fassina said 90% of the country had rejected the Monti agenda and warned that it would be a grave error to try to force through the same reviled plans a second time.
Comedian Beppe Grillo repeated his vow to “bring down the old system” and dismissed the latest talks as cattle market trading by a depraved political class trying to circumvent the will of the people.
In a rhetorical play on the slogans of 1789 and 1917 he exhorted “all citizens” to descend on parliament.
Mr Grillo repeated his call for an “online referendum” on the Euro and vowed to buy back €600bn of Italian bonds held by foreigners if his movement gains power, a de facto default and withdrawal from the EMU system.
He has in the past called for Argentine-style “haircuts” for bondholders.
His newly-elected army of senators and deputies - fresh-faced idealists in their 20s or early-30s with no experience in public life - met for a “conclave” to thrash out the party line.
Most of the 163 “grillini” have never met their leader, or each other. They crowded into a room at the Hotel Saint John, many sitting on the floor with their napsacks as if it was opening day at university.
Their first action was to create a “Google group” to handle logistics.
Investors have discounted Mr Grillo’s wild rhetoric as comic chatter, but his relish for shattering taboos in putting unthinkable ideas into play.
The EU policy elites are increasingly alert to the danger of losing popular consent for the EU Project.
European Central Bank governor Benoit Coeure said Europe must pay more attention to the “social contract” if it is to avoid feeding “nationalist temptations”.
Mr Coeure warned that record unemployment across much of Europe - reaching 59% for Greek youth - was eroding the job skills of a generation and doing lasting damage to future growth.
While the tone is changing, there is no sign yet of a retreat from fiscal belt-tightening.
Defying his critics, Mr Olli Rehn said John Maynard Keynes himself would not be a Keynesian today’s circumstances.
Yet Mr Rehn also warned Germany politicians that it would be courting fate to push Cyprus into default and exit from the Eurozone in the belief that the island is too small to pose a contagion risk.
Separately, it emerged that the Eurozone bail-out fund (ESM) may not be used after all to recapitalize banks, even once the banking super-regulator is in place.
Klaus Regling, the fund's chief, said opposition from the creditor states may kill the idea altogether.
If so, this will breaches a summit accord in June by EU leaders to deploy the ESM directly to break the “vicious circle” between banks and sovereign states.
Failure to implement the deal would be a blow for Ireland and Italy, leaving them shouldering the full burden left from a bank crisis that was partly caused by northern creditors.
The International Monetary Fund said it is imperative that the EU upholds the specific pledge made to Ireland in the summit text. Germany, Austria, Finland, and Holland have all all said they would not let the ESM cover "legacy assets" left from the bubble.
They now seem to be resiling from the accord altogether.
by Nick Squires, Rome, and Andrea
Vogt in Bologna
Mr Grillo warned that 'if conditions do not change'
Italy 'will want' to leave the euro and return to the lire
Photo: Getty Images
The rebel comic's warning came amid a growing rebellion among grass-roots supporters of his Five Star Movement, with 150,000 signing a petition calling for him to open up dialogue with the centre-Left Democratic Party, the biggest force in parliament.
With the country in political paralysis, there were also questions over his eccentric behavior, after the surreal public appearance of a man, either Beppe Grillo or one of his supporters, with his face obscured by a zipped up puffer jacket and a pair of ski goggles.
The bizarre figure, resembling a human fly, waved at photographers from the deck of Mr Grillo's beach house at Marina di Bibbona on the coast of Tuscany.
In an interview with a German magazine, Mr Grillo warned that,
The 64-year-old comic-turned-political activist also said Italy needs to renegotiate its €2 trillion debt.
At 127% of gross domestic product (GDP), it is the highest in the Eurozone after Greece.
He said Italy was in such dire economic straits that,
The comments will further hamper efforts to resolve the crisis caused by Italy's general election last week, in which Mr Grillo's web-based, anti-establishment movement won more than a quarter of the vote .
He is refusing to contemplate any sort of power-sharing deal with the centre-Left Democratic Party, which has shaky control of the upper and lower houses of parliament but lacks a big enough majority to form a government.
In the Focus interview, he said that an accord with the big parties would in theory be possible if they acceded to key parts of his movement's agenda, including,
Mr Grillo, renowned for his blistering attacks on Italy's established political caste, last week called Pier Luigi Bersani, the leader of the Democratic Party,
In the interview published yesterday he predicted the annihilation of both the centre-Left and the centre-Right coalition led by Silvio Berlusconi, the 76-year-old playboy who has been prime minister three times.
He also insisted that his party would not take part in any "horse-trading", describing the overtures from the Left as,
But he faces a growing clamor among his grass-roots supporters, however, to open up dialogue with the Democratic Party in order to break the log jam and form some sort of credible government.
An online petition begun on Wednesday by Viola Tesi, a 24-year-old member of the Five Star Movement from Florence, had by yesterday gathered nearly 150,000 signatures.
Miss Tesi wrote an open letter to Mr Grillo on the website, www.change.org, appealing to him not to "waste" her vote but to give a confidence vote to the Democratic Party so that a reforming government can be formed.
Grillo supporters should harness their unexpected triumph at the polls to compel the centre-Left to adopt the policies that would make Italy a better country, she said.
But with Mr Grillo apparently ignoring those appeals, the three-way deadlock has raised fears about Italy's ability to maintain desperately needed economic reforms initiated by Mario Monti, the former technocrat prime minister.
The comedian has said that his movement will remain outside any government, voting on individual bills in parliament on a case-by-case basis. Adding to the uncertainty is the fact that Mr Grillo refuses to talk to Italian journalists or to appear on current affairs television talk shows.
Italian reporters who have telephoned him and asked to speak to the general secretary of the party claim he has told them:
The new parliament has to meet by March 15 at the latest, after which formal talks with Giorgio Napolitano, the octogenarian Italian president, are scheduled to begin on the formation of a new government.
In the space of just three years, Mr Grillo's movement has come from nowhere to place him in the role of kingmaker.
During the election campaign he travelled Italy in a camper van in what he dubbed his "Tsunami Tour", filling piazzas with cheering supporters as he railed against entrenched political and business interests.
One prominent supporter is Dario Fo, the 86-year-old playwright and satirist, whose best known works include Accidental Death of an Anarchist and We Can't Pay, We Won't Pay - an apposite title given Mr Grillo's threats regarding Italy's debt.
Mr Fo said yesterday:
Mr Grillo's success means his party is poised to send more than 160 members into parliament's two chambers. Many are in their twenties and thirties and very few have any political experience, raising fears of legislative chaos if a government is eventually formed.
The "Grillini", as they are known, include nurses, teachers, students, lawyers, engineers, molecular biologists, bank clerks, and architects.
Some are unemployed. All are under 50 - a novelty in a country in which many politicians are well into their seventies.
Critics say they will be clueless in parliament and that their reliance on internet-based democracy to determine policies will be a recipe for disaster. Mr Grillo says their lack of political experience means they are untainted by corruption and cynicism.
One new MP, Ivan Catalano, 26, who works at a metal machining factory north of Milan, told The Sunday Telegraph:
He acknowledged there were differences of opinion within the movement but denied it was an open schism.
The movement's policies include tax cuts, a big increase in health spending and investment in the "green economy", but it has struggled to explain how this will be paid given Italy's mountain of debt.
Mr Grillo also wants deep cuts in defence spending and the scrapping of a high-speed rail link to France beneath the Alps.
The movement's newly-elected MPs and senators will meet one other for the first time in Rome on Monday to discuss whether to ignore their leader and support some sort of coalition.
Italians are divided as to whether the movement promises fresh blood for an anemic, corrupt system, or political and economic disaster for a country already mired in recession.
Another news weekly, Oggi, ran a photograph of Mr Grillo with the words,