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Italy's former Prime Minister Silvio Berlusconi speaks during a news conference at Villa Gernetto in Gerno near Milan October 27, 2012.
Credit: Reuters/Alessandro Garofalo
By Steve Scherer
Sat Dec 8, 2012 3:47pm EST
ROME (Reuters) - Silvio Berlusconi said on Saturday he will stand to lead Italy for a fifth time, challenging the leftist frontrunner a year after being forced to resign amid a sex scandal and a debt crisis.
The 76-year-old media tycoon, facing possible jail time for tax fraud and a trial for having sex with an underage prostitute, had hinted for months he might make a comeback in an election in about three months' time. He accuses technocrat Prime Minister Mario Monti of bringing the third-biggest euro zone economy to "the edge of an abyss" with austerity policies.
Berlusconi's center-right People of Liberty Party (PDL) lags Pier Luigi Bersani's center-left Democratic Party (PD) by at least 16 percentage points in opinion polls, and also trails the anti-establishment 5-Star Movement.
While another Berlusconi victory looks almost impossible, the man who has dominated Italy's center-right for 19 years may hope to help it win enough support to keep the center-left from winning a clear majority in both houses of parliament.
The question mark that remains over the election is whether the current prime minister will run. So far Monti has said he will step in only if the election result is unclear, but there has been speculation he could join forces with a centrist group.
Berlusconi's comeback arrives slightly more than a year after he resigned as prime minister as collapsing market confidence pushed Italy's debt costs to critical levels.
His international reputation had already been left in tatters by a lurid stories of "bunga bunga" parties with pole-dancing prostitutes at his home outside Milan. He is currently appealing a four-year jail sentence for tax fraud and faces a trial over paying for sex with an underage nightclub dancer.
Italians will probably vote in March with a recession that began mid-way through last year showing no signs of abating and unemployment at 11.1 percent, a record high.
"I race to win," Berlusconi told reporters at the practice field for AC Milan, the soccer club he controls, after repeating criticism of Monti's handling of the economy over the past year.
"To win, everyone said there had to be a tested leader. It's not that we did not look for one. We did, and how! But there isn't one... I'm doing it out of a sense of responsibility."
His move may unsettle financial markets, whose loss of faith in Berlusconi's guidance of the economy pushed the country to the edge of a Greek-style debt crisis last year and prompted President Giorgio Napolitano to ask the former European commissioner Monti to step in to restore confidence.
With the support of a right-left coalition including the PDL, Monti imposed austerity measures to bring borrowing costs under control, but Berlusconi said on Wednesday that the economic professor's policies had left Italy facing a "recessive spiral without end".
The PDL withdrew parliamentary support for Monti on Thursday, raising the specter of a snap election and driving up the difference between German and Italian benchmark bonds by about 30 basis points.
GOVERNMENT WILL NOT FALL
However, on Saturday Berlusconi said the PDL would pass legislation proposed by Monti's government, including next year's budget, and that March 10 was an acceptable date for the parliamentary election.
The media magnate has ample resources to back his bid - the country's biggest TV network, its biggest magazine publisher, and a family-owned newspaper.
He will likely campaign against Monti's tax increases, especially an unpopular housing levy, that were used to bring down the deficit, and against Germany's role in enforcing European austerity.
Berlusconi has also criticized the single currency, echoing comments by fiery comic Beppe Grillo, leader of the 5-Star Movement, who says Italy should hold a referendum over whether to keep the euro.
In his blog, Grillo commented that Berlusconi, whom he calls the "psycho-dwarf", is running for office again because he knows the average Italian "is literally terrified about the prospects of five more years of Monti-like rule".
PD leader Bersani and the prime minister have yet to comment on Berlusconi's decision. But Monti said on Saturday whoever takes over "must absolutely prevent Italy from going back into the situation" of last year, and he warned against "populism".
Monti was scheduled meet President Napolitano later on Saturday to discuss the political situation.
The PD this week had 30.3 percent support, up from 30 percent a week earlier, higher than a 19.7 percent readout for the 5-Star Movement, a poll by the SWG institute showed.
A second poll by research group Demos and Pi gave the PD 37.8 percent, up more than ten points from a poll in September.
The PDL saw a slight drop in both polls, with SWG showing it at 13.8 percent and Demos at 18.2 percent.
In the Demos survey, Berlusconi emerged as one of the least popular leaders among 16 graded, with an approval rating of just 20.8 percent. With 50.1 percent, PD leader Bersani was among the most popular, as was Monti, with 47.3 percent.
(With additional reporting by Elvira Pollina in Milan, Giselda Vagnoni in Rome, and Lionel Laurent in Cannes, France; Editing by Sophie Hares and Jason Webb)
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