April 11 (Bloomberg) -- Romano Prodi claimed victory in the closest Italian election since World War II, as Prime Minister Silvio Berlusconi demanded a recount.
Final results for the Chamber of Deputies showed Prodi's alliance winning by a margin of just 25,224 out of more than 38 million votes cast. In the Senate, Berlusconi's coalition held a one-seat lead, with the final outcome dependent on six seats set aside for Italians living abroad to be determined later today.
The returns raised the prospect that the two houses of parliament may wind up under divided control for the first time in half a century. Whatever the final result, the prime minister may be vulnerable to the demands of small coalition partners and find it hard to keep campaign promises to stimulate Italy's lagging economy and reduce the world's third-largest debt.
``A divided parliament would most likely lead to a temporary government,'' said Salvatore Zecchini, a professor of international economic policy at Rome's Tor Vergata University. A narrow majority for Prodi ``would make it very difficult to pass measures to boost growth and balance the public accounts.''
Whichever side wins the Senate will have only a narrow majority, excluding the votes of Italy's seven senators who are appointed for life. One life senator, former President Francesco Cossiga, said he would refrain from voting in a confidence vote. The other six haven't commented.
``We won,'' Prodi told flag-waving supporters in Rome at 2:53 a.m, almost 12 hours after the polls closed. ``Now we must work together to unify this country.''
`Work Together'
Berlusconi's spokesman, Paolo Bonaiuti, called for ``a scrupulous verification of the ballots,'' adding that Prodi had failed to take more than half the overall vote.
``The difference between them is so minimal that it leaves open the possibility of a long-standing dispute over the result,'' said Antonio Noto, director of IPR Marketing, one of Italy's leading pollsters, in a telephone interview.
The outcome of the Italian vote has parallels with the inconclusive election result in Germany in September. Christian Democrat Angela Merkel eventually formed a ``grand coalition'' with the Social Democrats after two months of talks which led to outgoing Social Democrat Chancellor Gerhard Schroeder's retirement from politics.
The 2000 U.S. presidential election won by George W. Bush hinged on a handful of votes in Florida.
Once the final results are in, Italian President Carlo Azeglio Ciampi, 85, will decide whether to ask Prodi or Berlusconi to try to form a government.
`Worst-Case Scenario'
``A split parliament would be the worst-case scenario,'' said Dario Perkins, an economist at ABN Amro NV in London.
Italy's economy is likely to trail that of its European neighbors for the 10th year in 11, according to European Commission forecasts. Prodi, 66, has promised to trim labor costs for businesses by $12 billion to stimulate growth and cut the world's third-biggest debt.
Prodi led by an average of 5 points in the final 10 opinion polls before a March 24 cutoff on surveys. In the final week of the campaign Berlusconi, 69, promised to eliminate the tax on first homes, while denouncing his rivals as communists and idiots. Prodi ended his campaign renewing pledges to seek unity and denouncing Berlusconi's economic record.
After exit polls showed Prodi comfortably ahead in both houses, the mood was euphoric among Prodi supporters gathered at his headquarters. When projections showed the race was tight, the mood changed visibly.
``I was happy for about five minutes,'' said Gina Guandalini, 55, who teaches literature at a private university in Rome. ``I wanted a landslide victory but it's painful to see that it's not going to be the case.''
Voting System
The vote was carried out under a new proportional voting system similar to the one that produced 52 governments in 48 years until it was abandoned in 1994.
During the final week of the campaign, Berlusconi attacked Milan magistrates for trying to end his political career. Prodi stressed the need for unity ``for the good of all of Italy.''
Prodi's previous administration collapsed in 1998 after little more than two years when a communist ally withdrew support and he lost a confidence vote by a single ballot. Three center-left governments and two different prime ministers rounded out that five-year legislature.
Berlusconi's Union of Christian Democrat allies forced him to step down and form a new government a year ago after losing 12 of 14 regional elections.