By Philip Pullella
ROME (Reuters) - Italy's president launches urgent talks on Tuesday that could see a prime minister designated after two months of post-electoral stalemate that has weighed on a stagnant economy and alarmed Rome's partners in the euro.
After directing an emotional blast of impatience on Monday at the very parliament which handed him an unprecedented - and heartily unwanted - second term as head of state at the weekend, 87-year-old Giorgio Napolitano has announced a "rapid round of consultations" with political leaders, starting early Tuesday.
Having threatened to resign if the parties continue with what he called their "irresponsibility" after the inconclusive parliamentary election of February 24 and 25, Napolitano seems determined to force the pace, and could even designate a prime minister to form a grand coalition government within the day.
One leading name is Giuliano Amato, a 75-year-old from the centre-left who has twice before been prime minister but no longer sits in parliament. Whoever is named is likely to forge a multi-party cabinet to take over from the technocrat government of outgoing Prime Minister Mario Monti, appointed in late 2011.
Though few in leadership show any appetite for holding a new election, any new administration may struggle for stability or the parliamentary backing for economic and political reforms that many argue are essential to revive Italy's competitiveness.
The centre-left narrowly won a majority in the lower house but failed to win control of the Senate and its inability since February to cut a deal with either Silvio Berlusconi's centre-right or the shock new third force of Beppe Grillo's anti-establishment 5-Star Movement has left the country in limbo.
The otherwise largely ceremonial presidency plays a key role in the process of forming coalitions and the happenstance of Napolitano reaching the end of his seven-year term while that deadlock was unresolved led to a series of failed attempts by parliament to elect a new head of state last week.
In the process, the main centre-left party fractured and its leader, Pier Luigi Bersani, resigned, adding to the complex political geometry Napolitano must now make sense of, having reluctantly agreed to be re-elected on Saturday.
PRESIDENT'S FRANKNESS
In his inaugural address to parliament on Monday, he made clear that he expected the parties to compromise and cooperate:
"I have a duty to be frank. If I find myself once again facing the kind of deafness I ran into in the past, I will not hesitate to draw the consequences," he said - a clear warning that he will resign if the party leaders fail to take heed.
He berated the parties for failing to reform a dysfunctional electoral law and accused the parties of a "long series of omissions and failures, obstruction and irresponsibility".
Financial markets welcomed his re-election and the prospect of a government with the power to take steps to revive the euro zone's third biggest economy, which is mired in recession.
Media tycoon Berlusconi was obliged to step down as prime minister in 2011 in favor of the technocrat Monti in the midst of scandal and fears of financial meltdown. But he and his People of Freedom (PDL) have emerged strengthened by the turmoil in Bersani's Democratic Party (PD).
The PDL seems likely to be involved in a coalition, but 5-Star, which won a quarter of the vote and speaks for millions of Italians utterly disillusioned with an entire political class, says it will sit in opposition in parliament.
Its founder Grillo, a stand-up comedian by profession, said any new government to emerge from negotiations would only protect the vested interests of a discredited elite.
Berlusconi's PDL has insisted it would only accept a coalition government giving it a share of power with the PD.
(Editing by Alastair Macdonald)
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