ROME, Jan 24 Italian Prime Minister Romano Prodi lost a confidence vote in the Senate on Thursday and will have to resign after a turbulent 20 months in office.

Prodis defeat will probably bring early elections, which polls suggest would return conservative Silvio Berlusconi to power. But President Giorgio Napolitano may first appoint an interim government to reform Italys messy electoral system.

Analysts said the demise of the 61st government since World War Two should not hurt the economy, as Prodi had been too busy surviving politically to carry out deep reforms. They said they hoped for electoral reform to cure Italys chronic instability.“This isnt necessarily bad news, it all depends what comes after Prodi,” said Unicredit MIB economist Marco Valli. “Markets dont like uncertainty but if what follows Prodi is a stronger government, then that could be positive.”

Prodis tenure was dogged by infighting in his centre-left coalition. The final blow was the defection of a small Catholic party this week, which erased his tiny majority in the Senate and made a vote of no confidence almost inevitable.

The 68-year-old academic known as the “Professor”, whose first spell as prime minister was cut short in 1998 when his communist allies deserted him, had warned senators that Italy “cannot afford a power vacuum” right now.—Reuters