Italy remains without a government four weeks after the country’s parliamentary elections. Last Friday, Italian President Giorgio Napolitano gave the head of the Democratic Party (PD), Pier Luigi Bersani, a mandate to form a government.

Over the last two days, however, Bersani has been bluntly rejected by both potential partners in a government—the right-wing People of Freedom (PDL) of Silvio Berlusconi and the populist 5-Star Movement (M5S) of comedian Beppe Grillo.

The basic dilemma Bersani confronts is that he is seeking to assemble a government to carry forward austerity policies demanded by the bank and the European Union (EU), although the Italian electorate repudiated such policies in the February 24-25 election. Incumbent Prime Minister Mario Monti, whose technocratic government ruthlessly imposed EU austerity measures after coming to power in November 2011, won only 10 percent of the vote.

The center-left coalition led by Pier Luigi Bersani and the electoral list of Mario Monti, which both called for a continuation of the previous austerity policies, were only able to gain 40 percent of the vote. Nearly 30 percent of voters supported the center-right coalition of Silvio Berlusconi, and 25 percent supported the Five Star Movement (5SM) of Beppe Grillo, both of which waged campaigns attacking Monti’s austerity measures and the EU.

Bersani does have a majority in the House of Deputies, as Italian electoral law awards the strongest alliance 54 percent of seats. In the Senate, however, Bersani depends on support from Grillo or Berlusconi to gain the 35 votes he needs to form a majority government.

On Tuesday, the PDL refused a request from Bersani to support a minority PD government, demanding instead that the PD form a PD-PDL coalition government.

Mocking Bersani’s consultations with business and union officials and non-governmental organizations, PDL legislator Renato said: “Pier Luigi Bersani can consult whoever he wants—Alcoholics Anonymous, desperate housewives—but he has to realize that the real economy of our country risks falling into the abyss if there isn’t an agreement among the two main political forces.”

Bersani has also until now ruled out another key PDL demand: a promise that the PD would support a PDL candidate for president, when Napolitano’s seven-year term expires in May.

Yesterday the M5S rejected Bersani’s request to support a PD government, though many M5S members largely agree with an eight-point plan presented to them by Bersani, and more broadly with Bersani’s pro-business politics. After the meeting, Grillo insulted Bersani and Berlusconi on his blog, calling them “whoremongers” who “screwed” a generation.

Should Bersani’s attempts to form a government fail, as now seems increasingly likely, Napolitano could ask another PD member, such as Bersani’s deputy Enrico Letta, to form a coalition government with the PDL. Otherwise, Napolitano could extend the term of the unpopular Monti government, or call new elections.

Italian workers’ deepening hostility to the EU and to Monti, and the limited electoral support for the pro-business PD, nominally Italy’s bourgeois “left” party, point to the enormous vacuum on the left. Together with the Italian bourgeois parties’ failure to form a government, this has staggered the European bourgeoisie, which is already reeling from the banking crisis in Cyprus.

Bersani’s first meetings last Saturday were with leading business leaders who reminded him that the country was gripped by a deep recession and had little time. The head of the employers’ association Confindustria, Giorgio Squinzi, told Bersani on Saturday that Italy faced the most difficult economic crisis in its history. Squinzi called on all parties to establish a viable government as soon as possible.

His appeals for a government of national unity to defend the interests of big business and the banks were echoed by union leaders who met with Bersani on Monday. Susanna Camusso, head of the largest trade union confederation, the CGIL (General Confederation of Italian Labor), called on Bersani to form a government in the national interest as soon as possible.

A similar message came from the head of the Christian CISL (Italian Federation of Workers Unions) federation Raffaele Bonnani. He warned that Italy “could end up like the Weimar Republic”—the period in German history between two world wars which ended with the victory of Fascism. “We need a new government at any price”, Bonnani declared.

In the recent election campaign, Bersani had ruled out any coalition with Berlusconi, however. After the election, Bersani fears that joining forces with the former premier will only serve to strengthen the hand of Grillo’s new M5S, which ran a campaign directed against all of the established parties.

Under conditions where all of the successor parties to the Italian Communist Party have fully integrated themselves into the camp of the bourgeoisie, the populist Beppe Grillo was able to exploit widespread discontent, especially amongst younger sections of the electorate, and win a quarter of the vote in the February election. (See, “In the Italian elections, Rifondazione Comunista emerges as a bourgeois party”)

The PD’s Rosario Crocetta has governed Sicily since last October with the backing of Grillo supporters, imposing austerity policies on the island. This example makes clear that the Grillo movement has no objection to the austerity policies demanded by the banks and supported by the PD and other Italian parties. (See, “Italy: Beppe Grillo’s inexorable move to the right”)

For his part, Berlusconi has made clear that he is willing to join forces with Bersani under the right conditions. Berlusconi urgently needs parliamentary immunity to ward off a series of ongoing criminal prosecutions against him, including vote buying, fraud and prostitution of minors. At the same time, he has laid down his own conditions. Berlusconi is demanding that a member of his PDL assume the post of deputy premier in a new government.

In a move regarded as an attempt to strengthen his hand in negotiations with Bersani, Berlusconi recently approved the formation of a new faction in the Senate, which calls itself Grande autonomy e Libertà (GAL). It consists of members of the Northern League, the PDL and the former right-wing MPA in movement in Sicily.

The publication Blogo.it writes of the new group that it could be “a kind of buffer which could support a government of the centre-left. Ten Little Indians led by Maroni (leader of the Northern League) and Berlusconi ready to reach out a hand to Bersani”.

While leaving open the option of a grand coalition, Berlusconi is also cultivating his links with the ultra-right. On Saturday March 23 his party organized a demonstration of several thousand supporters at the Piazza del Popolo in Rome with the slogan “All for Silvio”. Participating in the demonstration alongside Berlusconi was the mayor of Rome and former fascist Gianni Alemanno and the Duce’s granddaughter Alessandra Mussolini.

Berlusconi declared at the rally that his party was ready for elections if Bersani insisted on “the absurd attempt to form a minority government without sufficient numbers”.