West to send Syrian rebels aid, not arms

ROME (Reuters) - Western powers pledged aid for Syrian rebels on Thursday but stopped short of offering them weapons, disappointing opponents of President Bashar al-Assad clamoring for more arms.

More than 70,000 Syrians have been killed in a fierce conflict that began with peaceful anti-Assad protests nearly two years ago.

Washington has given $385 million in humanitarian aid for Syria but U.S. President Barack Obama has so far refused to give arms, arguing it is difficult to prevent them from falling into the hands of militants who could use them on Western targets.

The United States said it would for the first time give non-lethal aid to the rebels and would more than double its support to Syria's civilian opposition, casting it as a way to bolster the rebels' popular support.

The help will include medical supplies, food for rebel fighters and $60 million to help the civil opposition provide basic services like security, education and sanitation.

U.S. Secretary of State John Kerry announced the new steps after a meeting of 11 mostly European and Arab nations within the "Friends of Syria" group.

The European Union, acting on a decision this month to send direct aid to the rebels, said it had amended sanctions on Syria to permit the supply of armored vehicles, non-lethal military equipment and technical aid, provided they were intended to protect civilians.

If the provision of non-lethal assistance goes smoothly, it could conceivably offer a model for providing weaponry should Western governments ultimately decide to do so.

The aid offered for now did not appear to entirely satisfy the Syrian National Council opposition, a fractious Cairo-based group that has struggled to gain traction inside Syria, especially among disparate rebel forces.

"Many sides ... focus (more) on the length of the rebel fighter's beard than they do on the blood of the children being killed," Syrian National Coalition President Moaz Alkhatib said at an appearance with Kerry and Italian Foreign Minister Giulio Terzi.

A rebel commander in Aleppo, Syria's second city left devastated by several months of heavy fighting, said the lack of arms was the main obstacle to victory for his forces.

"We hope ... that weapons will flow and things will change but we are not waiting for them - we are going ahead with our fighting plans on the ground," the commander, Abdel-Jabbar Oqaidi, told Reuters by Skype.

He estimated that four fifths of the city was now under rebel control and the insurgents had taken over Aleppo's historic Umayyad mosque and the Palace of Justice. The claim could not immediately be verified.

A picture posted on the Internet showed what activists said was a rebel fighter prostrate in prayer in the Umayyad mosque's courtyard, its blackened archways still bearing signs of a fire which damaged the 13th century complex last year.

The rebels were still fighting for control of three airports in the Aleppo region, Oqaidi said.

DISAPPOINTMENT

In what analysts described as a sign of disappointment at the West's reluctance to send arms, Syria's political opposition postponed talks to choose the leader of a provisional government, two opposition sources told Reuters in Beirut.

Opposition leaders hoped a Saturday meeting in Istanbul would elect a prime minister to operate in rebel-controlled areas of Syria, threatened by a slide into chaos as the conflict between Assad's forces and insurgents nears its second anniversary.

While one source said the meeting might happen later in the week, a second source said it had been put off because the three most likely candidates for prime minister had reservations about taking the role without more concrete international support.

"The opposition has been increasingly signaling that it is tired of waiting and no one serious will agree to be head of a government without real political and logistical support," said Syrian political commentator Hassan Bali, who lives in Germany.

Bali said the United States and other members of the core "Friends of Syria" nations appeared intent "on raising the ante against Assad but are not sure how."

A final communiqué said participants would "coordinate their efforts closely so as to best empower the Syrian people and support the Supreme Military Command of the (rebel) Free Syrian Army in its efforts to help them exercise self-defense".

Kerry said the United States would for the first time provide assistance - in the form of medical supplies and the standard U.S. military ration known as Meals Ready to Eat, or MREs - to the fighters.

A U.S. official told reporters it would give the aid only to carefully vetted fighters, adding that the United States was worried that "extremists" opposed to democracy, human rights and tolerance were gaining ground in the country.

"Those members of the opposition who support our shared values ... need to set an example of a Syria where daily life is governed neither by the brutality of the Assad regime nor by the agenda of al Qaeda affiliated extremists," the official said.

REBELS WANT ANTI-TANK, ANTI-AIRCRAFT WEAPONS

The continued U.S. refusal to send weapons may compound the frustration that prompted the coalition to say last week it would shun the Rome talks. It attended only under U.S. pressure.

Many in the coalition say Western reluctance to arm rebels only plays into the hands of Islamist militants now widely seen as the most effective forces in the struggle to topple Assad.

With fighting raging on largely sectarian lines, French President Francois Hollande said at a Moscow summit that new partners were needed to broker talks on ending the crisis, winning guarded support from Russian President Vladimir Putin.

"We think that this dialogue must find a new form so that it speaks to all parties," said Hollande, giving few details of his proposal.

Putin said Russia - one of Assad's staunchest allies - would look at Hollande's proposal, "which I think we could consider with all our partners and try to carry out."

Russia has said Assad's departure must not be a precondition for talks and a political solution, while the West has sided with Syria's opposition in demanding his removal from power.

Kerry's offer of medical aid and food rations fell far short of rebel demands for sophisticated anti-tank and anti-aircraft weapons to help turn the tables against Assad's mostly Russian-supplied forces.

It also stopped short of providing other forms of non-lethal assistance such as bullet-proof vests, armored personnel vehicles and military training to the insurgents.

Last week the European Union opened the way for direct aid to Syrian rebels, but did not lift an arms embargo on Syria.

Kerry said the U.S. role should not be judged in isolation but in the context of what other nations will do.

"What we are doing ... is part of a whole," he said. "I am absolutely confident ... that the totality of this effort is going to have an impact of the ability of the Syrian opposition to accomplish its goals."

(Additional reporting by Mariam Karouny; Writing by Alistair Lyon; Editing by Roger Atwood and Tom Pfeiffer)

Read More..

Groupon CEO "fired" after losses, stock slump

NEW YORK: Groupon said Thursday it was replacing chief executive Andrew Mason, who said he was "fired," following the struggling daily deals firm's share price plunge of 24 percent after bad quarterly results.

The company said executive chairman Eric Lefkofsky and vice chairman Ted Leonsis would take over the post of chief executive, effective immediately and that Groupon "will continue to invest in growth."

The board thanked Mason, a founder of Groupon, and said it has begun a search for a new chief executive.

"Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history," said Lefkofsky.

Leonsis said: "Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future."

Mason, in a letter to employees, said he was "fired" but remained upbeat about the company.

"I love Groupon, and I'm terribly proud of what we've created," Mason said.

"I'm OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through."

Sentiment has been souring on Groupon, which made a splash with its 2011 stock market debut but has been dogged by fears of "deal fatigue," and worries about its profitability as well as accounting questions.

"We believe uncertainties with Groupon remain due to staff turnover, competition, and increased investments," said a note earlier Thursday from Edward Woo at Ascendiant Capital Markets.

"In our view, the slowing growth and weak margins are likely to bolster continued skepticism as to Groupon's valuation, growth prospects, and profit potential."

Groupon's shares slumped to $4.53 at Thursday's close, a 77 percent drop from its public offering price of $20 in November 2011.

Scott Devitt at Morgan Stanley said Groupon's mission appears muddled now that it has moved into new services such as direct sales to consumers, and not just coupons for discounts with merchants.

"We continue to believe Groupon is a local ecommerce leader. However, we remain on the sidelines as the company experiments with myriad operating levers and strategies," the analyst said.

"We would become more constructive on the stock if we could better understand Groupon's ability to integrate the product companies it has acquired with the internally developed projects.

The Chicago-based firm reported a loss of $81 million in the fourth quarter, and a $67 million dollar deficit for the full year.

The loss translated to 12 cents per share in the quarter, compared with expectations of a profit of three cents a share.

With the daily deals sector fading fast, Groupon also offered a weak revenue outlook of $560 million to $610 million, well below market expectations of $650 million.

Groupon shares were listed on the Nasdaq in 2011 in a blockbuster public offering that raised a whopping $700 million and triggered fears that investors were overvaluing hot Internet startups.

The troubles at Groupon come amid ongoing woes at number two sector member LivingSocial, also losing money.

- AFP/ac

Read More..

Sariska villagers block tourists’ entry

ALWAR: About 2,500 villagers on Thursday blocked the main entrance of the Sariska Tiger Reserve, protesting their relocation from areas near the sanctuary.

Sariska field director RS Shekhawat said the villagers had locked the entrance and didn't allow tourists to enter the park. "We are trying to sort out the problem on a priority basis," Shekhawat said.

The villagers, who are on an indefinite sit-in, said they would not clear the blockade unless their demands were met. This is the third such protest in the past eight months against the relocation plan.

Tension began in Sariska when about 2,500 people from 50 villages gathered for a mahapanchayat against the alleged "cheating" by the district administration. "We had called off the agitation in May last year when the district administration agreed on some of our demands including lifting ban on the registry of land, construction of a concrete road and earmarking a grazing area. But now they have backtracked on the promise citing the Supreme Court orders," said Jaikishan Gujjar, a villager.

Since 2008, the farmers in the periphery of the reserve have been protesting the state government and wildlife authorities' decision to relocate them. On February 20, villagers thrashed a few senior sanctuary officials when 70 cattle were seized while grazing in the sanctuary area.

Read More..

Obama Admin to Urge End to Gay Marriage Ban

Solicitor General Donald B. Verrilli, plans to file a brief today with the Supreme Court in favor of challengers of Prop. 8, according to an administration source.

It would mark the first time that the Obama administration has come out in court against the California ballot initiative that defines marriage as between one man and one woman.

As far back as 2008, the president said that he thought Prop 8 was "divisive and discriminatory," but his Justice Department has never opined on its constitutionality. Because the DOJ is not a party to the case, it is not required to file a "friend of the court" brief, but the deadlines for briefs supporting the challengers to Prop 8 is tonight at midnight.

Justin Sullivan/Getty Images

Theodore Olson, one of the lead lawyers challenging Prop 8, told reporters last week that he hoped the DOJ lawyers would take the opportunity to set down a legal position.

In Depth: Obama's Prop 8 Decision

"However," Olson added, "whether they do or not, the president of the United States made it very clear in his inaugural address that we cannot rest in America until all civilians have equal rights under the law so, in a sense, the president has made that statement already."

Today, 39 states have laws restricting marriage to opposite-sex couples. This number includes voter-approved constitutional amendments in 30 states barring same sex marriage. Nine states allow gay marriage.

Related: Eric Holder Says Gay Marriage is the Next Civil Rights Issue

Related: Republican Moderates Join Legal Fight for Gay Marriage

Read More..

Iran upbeat on nuclear talks, West still wary

ALMATY (Reuters) - Iran was upbeat on Wednesday after talks with world powers about its nuclear work ended with an agreement to meet again, but Western officials said it had yet to take concrete steps to ease their fears about its atomic ambitions.

Rapid progress was unlikely with Iran's presidential election, due in June, raising domestic political tensions, diplomats and analysts had said ahead of the February 26-27 meeting in the Kazakh city of Almaty, the first in eight months.

The United States, China, France, Russia, Britain and Germany offered modest sanctions relief in return for Iran curbing its most sensitive nuclear work but made clear that they expected no immediate breakthrough.

In an attempt to make their proposals more palatable to Iran, the six powers appeared to have softened previous demands somewhat, for example regarding their requirement that the Islamic state ship out its stockpile of higher-grade uranium.

Iran's chief nuclear negotiator Saeed Jalili said the powers had tried to "get closer to our viewpoint", which he said was positive.

In Paris, U.S. Secretary of State John Kerry commented that the talks had been "useful" and that a serious engagement by Iran could lead to a comprehensive deal in a decade-old dispute that has threatened to trigger a new Middle East war.

Iran's foreign minister said in Vienna he was "very confident" an agreement could be reached and Jalili, the chief negotiator, said he believed the Almaty meeting could be a "turning point".

However, one diplomat said Iranian officials at the negotiations appeared to be suggesting that they were opening new avenues, but it was not clear if this was really the case.

Iran expert Dina Esfandiary of the International Institute for Strategic Studies said: "Everyone is saying Iran was more positive and portrayed the talks as a win."

"I reckon the reason for that is that they are saving face internally while buying time with the West until after the elections," she said.

The two sides agreed to hold expert-level talks in Istanbul on March 18 to discuss the powers' proposals, and return to Almaty for political discussions on April 5-6, when Western diplomats made clear they wanted to see a substantive response from Iran.

"Iran knows what it needs to do, the president has made clear his determination to implement his policy that Iran will not have a nuclear weapon," Kerry said.

A senior U.S. official in Almaty said, "What we care about at the end is concrete results."

ISRAELI WARNING

Israel, assumed to be the Middle East's only nuclear-armed power, was watching the talks closely. It has strongly hinted it might attack Iran if diplomacy and sanctions fail to ensure that it cannot build a nuclear weapon. Iran denies any such aim.

Israeli Prime Minister Benjamin Netanyahu said economic sanctions were failing and urged the international community to threaten Iran with military action.

Western officials said the offer presented by the six powers included an easing of a ban on trade in gold and other precious metals, and a relaxation of an import embargo on Iranian petrochemical products. They gave no further details.

In exchange, a senior U.S. official said, Iran would among other things have to suspend uranium enrichment to a fissile concentration of 20 percent at its Fordow underground facility and "constrain the ability to quickly resume operations there".

The official did not describe what was being asked of Iran as a "shutdown" of the plant as Western diplomats had said in previous meetings with Iran last year.

Iran says it has a sovereign right to enrich uranium for peaceful purposes, and wants to fuel nuclear power plants so that it can export more oil.

But 20-percent purity is far higher than that needed for nuclear power, and rings alarm bells abroad because it is only a short technical step away from weapons-grade uranium. Iran says it produces higher-grade uranium to fuel a research reactor.

Iran's growing stockpile of 20-percent-enriched uranium is already more than half-way to a "red line" that Israel has made clear it would consider sufficient for a bomb.

In Vienna on Wednesday, a senior U.N. nuclear agency official told diplomats in a closed-door briefing that Iran was technically ready to sharply increase this higher-grade enrichment, two Western diplomats said.

"Iran can triple 20 percent production in the blink of an eye," one of the diplomats said.

The U.S. official in Almaty said the powers' latest proposal would "significantly restrict the accumulation of near-20-percent enriched uranium in Iran, while enabling the Iranians to produce sufficient fuel" for their Tehran medical reactor.

This appeared to be a softening of a previous demand that Iran ship out its stockpile of higher-grade enriched uranium, which it says it needs to produce medical isotopes.

Iran has often indicated that 20-percent enrichment could be up for negotiation if it received the fuel from abroad instead.

Jalili suggested Iran could discuss the issue, although he appeared to rule out shutting down Fordow. He said the powers had not made that specific demand.

The Iranian rial, which has lost more than half its foreign exchange value in the last year as sanctions bite, rose some 2 percent on Wednesday, currency tracking websites reported.

(Additional reporting by Fredrik Dahl and Yeganeh Torbati in Almaty, Georgina Prodhan in Vienna, Zahra Hosseinian in Zurich, Gabriela Baczynska in Moscow, Dan Williams in Jerusalem and Marcus George in Dubai; Writing by Timothy Heritage and Fredrik Dahl; Editing by Louise Ireland)

Read More..

Brin sees Google glasses hitting market this year

LONG BEACH, California: Sergey Brin envisions Google's Internet glasses hitting the market this year with an eye toward freeing people from unsocial habits engendered by "emasculating" smartphones.

Brin spoke of inspiration behind Google Glass eyewear during a brief appearance Wednesday on stage at a TED Conference known for an inspiring mix of influential big thinkers and "ideas worth spreading.

He playfully demonstrated his point on stage by ignoring a theater audience to stare down at his smartphone, saying he was intent on a message from a Nigerian prince need of $10 million dollars.

"I like to pay attention because that is how we originally funded the company," the Google co-founder quipped about a well-known scam.

"Seriously, in addition to potentially socially isolating yourself when you are out and about using your phone, I feel it is kind of emasculating," he continued.

Brin described Glass as the first form factor to deliver on a vision he had from Google's inception that one day search queries would be outmoded and information from the Internet would come to people when they need it.

Glass frees the eyes as well as the hands when it comes to connecting to the Internet on the go, according to Brin.

"That is why we put the display up high, out of the line of sight," Brin said, wearing the Glass eyewear he is rarely seen without.

"If I wore a ball cap, the display would be on the brim and not where you are looking," he continued. "And sound goes through bones in the cranium, which is a little freaky at first, but you get used to it."

Glass wearers can speak commands to the eyewear, and built-in camera technology allows pictures or video to be captured from first-person perspectives while people take part in what is happening.

"Lastly, I realized I also have a nervous tic," Brin said. "The cell phone is a nervous habit. If I smoked, I'd probably smoke instead."

He observed that smartphones sometimes become props used by people as distractions or to appear busy, saying that Glass strips away excuses not to be sociable or to not be honest about simply wanting to take a break.

"It really opened by eyes to how much of my life I spent secluded away in email, social posts or what-not," Brin said. "There is nothing bad about that, but with this thing I don't have to be checking them all the time."

Brin said Glass eyewear will be available later this year at prices lower than the $1,500 charged to software developers and early adopters during a restricted test phase.

Wednesday was the last day for "explorers" with creative vision and $1,500 to spare to vie to be part of a select group of people who get to experiment with Glass.

A video intended to capture what it feels like to use Glass was online at google.com/glass/start/.

Google has been speaking with eyeglass frame companies about ideas for a consumer version of the glasses, which he expected would cost "significantly" less than the Explorer prototypes.

US adults interested in the program had to say what they would do if they had Glass eyewear and then post the messages at Twitter or Google+ social networks with hashtag #ifihadglass.

People chosen for the Explorer program will need to pick up in person at sessions to be held in New York, Los Angeles, or San Francisco.

- AFP/ac

Read More..

Cash-in-bag case: HC notice to CBI on Yadav's plea regarding prosecution sanction

CHANDIGARH: The Punjab and Haryana high court on Wednesday issued a notice to the CBI on a petition filed by Justice Nirmal Yadav (retired), an accused in cash-in-bag case, seeking photocopies of the record of ministry of law and justice pertaining to her prosecution sanction.

While issuing notice to the CBI for March 21, Justice Ranjit Singh asked CBI to file its reply on the demand of Yadav, who filed an appeal after a special CBI judge, Chandigarh, rejected her demand for the record on February 2. The special court had allowed her to inspect the documents but not allowed her to photocopy them.

In her appeal, justice Yadav claimed that the Code of Criminal Procedure (CrPc) came into force in 1973, when technology was not so advanced. In case of a voluminous record, inspection, rather than supply of copies, was a solution.

"Those were the days of manual typewriters. But over the years technology has progressed and providing copies of documents was now a matter of minutes due to efficient photocopiers," argued her counsel, adding that they are ready to bear the cost of photocopies of the record.

She also added that non-supply of documents was against the principles of natural justice, as these would be relied upon by the prosecution during the trial.

The scandal had come to the fore on August 13, 2008, after a clerk, allegedly sent by the then additional advocate general of Haryana, Sanjiv Bansal, dropped the money at the official residence of Justice Nirmaljit Kaur of the Punjab and Haryana high court. Later, an inquiry by CBI found that the money was meant for Justice Yadav.

Later, on March 4, 2011, CBI had filed charge sheet against Yadav, Bansal, Delhi based hotelier Ravinder Bhasin, Chandigarh based businessman Rajiv Gupta and Nirmal Singh for corruption, conspiracy, destroying evidence and creation of false evidence. The trial against all of these accused is pending with the special CBI court Chandigarh.

Read More..

Vt. lye victim gets new face at Boston hospital

BOSTON (AP) — The 2007 chemical attack left the Vermont nurse unrecognizable to anyone who knew her.

But now Carmen Blandin Tarleton's face has changed again following a facial transplant this month.

Doctors at Brigham & Women's Hospital in Boston said Wednesday that the 44-year-old's surgery included transplanting a female donor's facial skin to Tarleton's neck, nose and lips, along with facial muscles, arteries and nerves.

"I know how truly blessed I am, and will have such a nice reflection in the mirror to remind myself what selfless really is," Tarleton wrote on her blog Wednesday.

The Thetford, Vt., woman suffered burns on more than 80 percent of her body and was blinded after her estranged husband attacked her with a baseball bat and doused her with lye in 2007.

Tarleton, who once worked as a transplant nurse, has undergone more than 50 surgeries since the attack, including work to restore some of her vision.

The latest surgery took 15 hours and included a team of more than 30 medical professionals. The lead surgeon, Bohdan Pomahac, called her injuries among the worst he's seen in his career.

"Carmen is a fighter," the doctor said Wednesday. "And fight she did."

Pomahac's team has performed five facial transplants at the hospital. He said the patient is recovering very well and is in great spirits as she works to get stronger.

He said she was very pleased when she saw her face for the first time, and that her appearance will not match that of the late donor's face.

"I think she looks amazing, but I'm biased," he said with a smile.

The donor's family wants to remain anonymous, but released a statement through a regional donor bank saying that her spirit would live on through Tarleton and three other organ recipients.

The estranged husband, Herbert Rodgers, pleaded guilty in 2009 in exchange for a prison sentence of at least 30 years.

Read More..

Newtown Dad's Tearful Plea at Senate Gun Hearing

A father who lost his son in the massacre at Sandy Hook Elementary School sobbed as he testified at a Senate hearing today in favor of an assault weapons ban.

Across town Vice President Biden alluded to untold horror of the Newtown tragedy in an appeal for help from the nation's attorneys general.

Despite their emotional appeals, the push for gun reforms championed by the White House and many Democrats faces an uncertain future.

"Jesse was the love of my life," said Neil Heslin, sobbing as he described his 6-year-old son before the Senate Judiciary Committee. "He was the only family I had left. It's hard for me to be here today to talk about my deceased son. I have to. I'm his voice."

Heslin's son, Jesse Lewis, was among the 20 children and six teachers and school administrators murdered at Sandy Hook Elementary in Newtown, Conn. last December. Heslin recounted his last moments with his son when he took him to pick up his favorite, sausage egg and cheese sandwich and hot chocolate before dropping him off at school on the morning of Dec. 14.

"It was 9:04 when I dropped Jesse off. Jesse gave me a hug and a kiss and at that time said goodbye and love you. He stopped and said, I loved mom too." Heslin and his wife are separated.

"That was the last I saw of Jesse as he ducked around the corner. Prior to that when he was getting out of the truck he hugged me and held me and I could still feel that hug and pat on the back and he said everything's going to be ok dad. It's all going to be ok," Heslin said breaking down in tears a second time. "It wasn't ok. I have to go home at night to an empty house without my son."

Army Vet Awarded Medal of Honor for Afghan Firefight Watch Video

Heslin was one of eight witnesses testifying at a hearing to back a proposed assault weapons ban. Another witness was Dr. William Begg, a physician who made it to the emergency room the day of the Newtown shooting.

"People say that the overall number of assault weapon deaths is small but you know what? Please don't tell that to the people of Tucson or Aurora or Columbine or Virginia Tech, and don't tell that to the people in Newtown," Begg said as he choked up and people in the crowd clapped. "Don't tell that to the people in Newtown. This is a tipping point. This is a tipping point and this is a public health issue. Please make the right decision."

Related: Read More About Heslin's Testimony

The Senate Judiciary Committee is set to consider four gun safety measures, including the assault weapons ban, on Thursday. The three other bills aim to stop illegal gun trafficking, enhance safety in schools, and enact universal background checks.

As the hearing unfolded on Capitol Hill, Biden tapped into the stories that Newtown's first responders have shared with him as he urged attorneys general to help the administration push their gun proposals.

Related: The Tragedy at Sandy Hook

"With the press not here, I can tell you what is not public yet about how gruesome it was," Biden said of the massacre's gruesome aftermath at a Washington luncheon. "I met with the state troopers who were on the scene this last week. And the impact on them has been profound. Some of them, understandably, needing some help."

A spokeswoman for Biden could not clarify the non-public information to which he referred. The vice president suggested that what he heard in private conversations should spur lawmakers to enact some measures aimed at curbing gun violence.

Related: President Obama's Campaign Organization Turns to Gun Control

Read More..

Italy parties seek way out of election stalemate

ROME (Reuters) - Italy's stunned political parties searched for a way forward on Tuesday after an inconclusive election gave none of them a parliamentary majority and threatened prolonged instability and a renewal of the European financial crisis.

The results, notably the dramatic surge of the anti-establishment 5-Star Movement of comic Beppe Grillo, left the center-left bloc with a majority in the lower house but without the numbers to control the upper chamber, the Senate.

Financial markets fell sharply at the prospect of a stalemate that reawakened memories of the crisis that pushed Italy's borrowing costs toward unsustainably high levels and brought the euro zone to the brink of collapse in 2011.

"The winner is: Ingovernability," ran the headline in Rome newspaper Il Messaggero, reflecting the deadlock the country will have to confront in the next few weeks as sworn enemies are forced to work together to form a government.

Ratings agency Standard & Poor's said on Tuesday that policy choices of the next Italian government would be crucial for the country's creditworthiness, underlining the need for a coalition that can agree on new reforms.

Pier Luigi Bersani, head of the center-left Democratic Party (PD), has the difficult task of trying to agree a "grand coalition" with former prime minister Silvio Berlusconi, the man he blames for ruining Italy, or striking a deal with Grillo, a completely unknown quantity in conventional politics.

The alternative is new elections either immediately or within a few months, although both Berlusconi and Bersani have indicated that they want to avoid a return to the polls if possible: "Italy cannot be ungoverned and we have to reflect," Berlusconi said in an interview on his own television station.

For his part, Grillo, whose movement won the most votes of any single party, has indicated that he believes the next government will last no more than six months.

"They won't be able to govern," he told reporters on Tuesday. "Whether I'm there or not, they won't be able govern."

He said he would work with anyone who supported his policy proposals, which range from anti-corruption measures to green-tinted energy measures but rejected suggestions of entering a formal coalition: "It's not time to talk of alliances... the system has already fallen," he said.

The election, a massive rejection of the austerity policies applied by Prime Minister Mario Monti with the backing of international leaders from U.S. President Barack Obama to German Chancellor Angela Merkel, caused consternation across Europe.

German Finance Minister Wolfgang Schaeuble put a brave face on it, saying "that's democracy".

Spanish Foreign Minister Jose Manuel Garcia-Margallo was more pessimistic.

"This is a jump to nowhere that does not bode well either for Italy or Europe," he said.

A long recession and growing disillusionment with mainstream parties and tax-raising austerity fed a bitter public mood and contributed to the massive rejection of Monti, whose centrist coalition was relegated to the sidelines.

Projections by the Italian center for Electoral Studies showed that the center-left will have 121 seats in the Senate, against 117 for the center-right alliance of Berlusconi's PDL and the regionalist Northern League. Grillo would take 54.

That leaves no party with the majority in a chamber which a government must control to pass legislation.

"THE BELL IS RINGING"

On a visit to Germany, President Giorgio Napolitano said he would not comment until the parties had consulted with each other and Bersani called on Berlusconi and Grillo to "assume their responsibilities" to ensure Italy could have a government.

He warned that the election showed austerity policies alone were no answer to the economic crisis and said the result carried implications beyond Italy.

"The bell is ringing for Europe as well," he said in his first public comments since the election.

He said he would present a limited number of reform proposals to parliament, focusing on jobs, institutional reform and European policy.

However forming an alliance may be long and difficult and could test the sometimes fragile internal unity of the mainstream parties.

"The idea of a majority without Grillo is unthinkable. I don't know if anyone in the PD is considering it but I'm against it," said Matteo Orfini, a member of Bersani's PD secretariat.

"The idea of a PD-PDL government, even if it's backed by Monti, doesn't make any sense," he said.

For his part, Berlusconi won a boost when his Northern League ally Roberto Maroni won the election to become regional president of Lombardy, Italy's economic heartland and one of the richest and most productive areas of Europe.

For Italian business, with an illustrious history of export success, the election result brought dismay that there would be no quick change to what they see as a regulatory sclerosis that has kept the economy virtually stagnant for a decade.

"This is probably the worst possible scenario," said Francesco Divella, whose family began selling pasta under its eponymous brand in 1890 in the southern region of Puglia.

Berlusconi's campaign, mixing sweeping tax cut pledges with relentless attacks on Monti and Merkel, echoed many of the themes pushed by Grillo and underlined the increasingly angry mood of the Italian electorate.

But even if the next government turns away from the tax hikes and spending cuts brought in by Monti, it will struggle to revive an economy that has scarcely grown in two decades.

Monti was widely credited with tightening Italy's public finances and restoring its international credibility after the scandal-plagued Berlusconi, who is currently on trial for having sex with an under-age prostitute.

However, Monti struggled to pass the kind of structural reforms needed to improve competitiveness and lay the foundations for a return to economic growth. A weak center-left government may not find it any easier.

The view from some voters, weary of the mainstream parties, was unrepentant: "It's good," said Roger Manica, 28, a security guard in Rome, who voted for the center-left PD.

"Next time I'll vote 5-Star. I like that they are changing things, even if it means uncertainty. Uncertainty doesn't matter to me, for me what's important is a good person who gets things done," he said. "Look how well they've done."

(Additional reporting by Barry Moody, Gavin Jones, Lisa Jucca, Steven Jewkes, Steve Scherer, Catherine Hornby and Massimiliano Di Giorgio, Annika Breidthardt in Berlin. Writing by Philip Pullella and James Mackenzie; Editing by Peter Graff)

Read More..