16 April 2008: Italy’s third richest man, Silvio Berlusconi, is returning as prime minister for a historic third term after his center-right coalition won parliamentary elections in a stunning victory. Allies of Mr. Berlusconi swept in both houses with margins that were higher than expected in the two-day ballot held Sunday and Monday, April 13-14.

It is illegal in Italy to publish opinion polls two weeks prior to an election and the last polls had showed Mr. Berlusconi’s opponent, leader of the center-right Walter Veltroni, behind the media tycoon, but closing the gap in the final weeks before the vote. The comeback for the conservative billionaire follows two years in opposition.

The elections for the upper and lower house of Parliament have also resulted in some historic changes in Italian politics, notably fewer parties, a clear majority; and a shift to the right.

There have traditionally been too many small parties for the government to function smoothly in Italy. The large number of parties has stymied Italian parliaments and Mr. Berlusconi’s will be the 62nd government since World War II. The government of outgoing Prime Minister Romano Prodi was plagued with endless bickering and was unable to pass meaningful laws. Mr. Prodi, a former president of the European Commission, enjoyed only a one vote majority in the upper house. The Prodi government finally collapsed last January, three years before the end of its term. Mr. Berlusconi on the other hand now has a comfortable 37-seat majority in the Senate, and the elections drastically reduced the number of parties in parliament from 26 to six.

Last October Mr. Veltroni, a former mayor of Rome, took over as head of the center-left alliance uniting former Communists and progressive Christian democrats from Mr. Prodi’s coalition.

There have also been recent changes to Italy’s electoral laws allowing for each side to control one of the houses of parliament, which could have led to complete gridlock. However fears of a hung parliament were put to rest as the center-right coalition firmly won both the Senate and the Chamber of Deputies and is in a position to push through promised economic reforms. Mr. Berlusconi’s coalition will automatically get 340 of the 630 seats in the lower house because of the new “majority prize” law meant to reduce Italy’s history of divided government. After the vote Mr. Berlusconi said, “Now we can govern like a Western democracy.”

Official results showed Mr. Berlusconi’s People of Freedom Party (PDL) took 37.4 percent ahead of Mr. Veltroni’s Democratic Party at 33.2 percent and his ally, the Italy of Values (IDV) party, which came in fifth at 4.4 percent. One small party allied to Mr. Berlusconi, the Sicilian-based Movement for Autonomy, squeaked in at 1.1 percent by qualifying under Italy’s cumbersome election laws.

The biggest losers in the election were the smaller parties, both on the far right but particularly on the far-left. Except for the centrist Catholic Union of the Centre (UDC), which lost some support but still came in fourth with 5.6 percent, other Christian democratic parties were eliminated. And for the first time in modern Italian history the Socialists and Communists will not have one member in either house of parliament. The demise of dozens of parties shows a trend toward a two-party system in Italy.

The former Communist leader Fausto Bertinotti immediately resigned as chief of the alliance of the far-left and the Greens. A former Berlusconi ally, Pier Ferdinando Casini announced that his UDC would remain an opposition party but may often vote with the government.

Although Mr. Berlusconi will not have to deal with the far-left in opposition, critics say he may be hamstrung by one of his own allies, the Northern League which came in third with 8.3 percent of the vote. The populist LN is anti-immigrant and in the past has called for the north to break away from Rome. However LN leader Umberto Bossi has modified some of his party’s demands and is now only pushing for more autonomy for the north which heavily subsidizes the southern provinces.

Economic concerns were the biggest issues in the election as Italy continues to spiral toward recession. Mr. Berlusconi ran on promises to improve Italy’s competitiveness and productivity—Italian workers’ productivity is at the bottom of the OECD countries.

Mr. Berlusconi vowed to reduce taxes and cut spending in order to revive Europe’s fourth largest economy and reduce the national debt, which is the third highest in the world.

Among the first of his initiatives Mr. Berlusconi announced that his new cabinet will contain half the number of ministers as the previous one. He named EU Justice Commissioner Franco Frattini as his foreign minister, and long-time aid Gianni Letta becomes deputy prime minister, while Giulio Tremonti returns to handle the economy.

Critics of Mr. Berlusconi say as prime minister he has a conflict of interest because of his media holdings and ownership of three television stations. The 71-year old is also still under investigation for alleged corruption, but Italian voters seem to have overlooked Mr. Berlusconi’s shortcomings and chose him to find solutions to their economic problems.

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