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. Last Updated: 07/27/2016

Prodi Claims Election Laurels

ROME -- Center-left leader Romano Prodi claimed victory in Italy's election on Tuesday, but his tiny margin raised fears of political paralysis and Prime Minister Silvio Berlusconi's allies demanded a review of the count.

Prodi's alliance won in the lower house, and Sky Italia TV projected that it would have a majority of one or two seats in the upper house Senate thanks to votes of Italians abroad that were still being counted.

"We can govern for five years," Prodi told reporters. "Of course we'll need cooperation, but last night I said we would work for all Italians, not just some."

However, the victory margin was so slim that the center-right contested it and markets worried that Prodi would have a hard time enacting badly-needed reforms, cutting Italy's debt mountain or tackling its budget deficit.

"The threat of a stalemate, the worst possible scenario, has emerged and clouds the future with uncertainty," bank UBM said in a note to its clients.

In the lower house Chamber of Deputies, Prodi's bloc had taken about 49.80 percent of the vote compared with 49.73 percent for Berlusconi. The winning margin was around 25,000 votes, a tiny fraction of the 47 million eligible electors. In the Senate, the center-left was set to have a one- or two-seat majority, but definitive results were only expected later on Tuesday as the count of the overseas vote was completed.

"Divided country", "Neck-and-Neck" and "Split down the Middle" were the headlines used in most mainstream newspapers to describe the vote, the closest election in modern history.

In an apparent bid to head off any battle over the result, President Carlo Ciampi issued a statement praising the "orderly and correct" voting process.

However, commentators and frustrated ordinary Italians feared the election could hobble the country.

"I think we'll have a government that lasts six months and then parliament will fall apart, and we will have to vote again," said Pietro Bianchi, a Milan banker.

Under Italy's new electoral system, the ballot winners are automatically granted 340 of the lower house's 630 seats no matter how small their margin of victory in the popular vote, with the runners-up getting some 277 seats.

Center-right politicians asked for checks on nearly half a million spoiled ballots that had been declared null and void.

"Such a tiny difference necessitates a scrupulous checking of the counting and tally sheets," Paolo Bonaiuti, Berlusconi's right-hand man, told reporters in the pre-dawn hours.

Berlusconi, who dominated the election campaign and wrong-footed his opponents with a last minute pledge to abolish a property tax, has not yet commented on the results.

Monday's exit polls suggested Prodi had secured a clear win, but as the count progressed, Berlusconi closed the gap.