Rome: Italy’s main political parties have been unable to come to an agreement to form a coalition government which has led the country’s president to lay out the options -- the country facing fresh elections or a neutral caretaker government until the end of the year.

President Sergio Mattarella said on Monday that those were the only two options left after a third round of negotiations were unsuccessful. The parties with the most number of seats, Five Star and The League, favour a new vote in July. However, President Mattarella has the final say.

Italy is facing the current situation due to an election that threw up a fractured mandate and no single party or alliance won a majority in the March general election.

In a televised public statement on Monday, Mattarella urged party leaders to rally behind a "neutral government" after conceding that there would be no coalition deal.

"We can't wait any longer," he said. "Let the parties decide of their own free will if they should give full powers to a government... or else new elections in the month of July or the autumn."

Mattarella had yesterday urged Italy's deadlocked political leaders to back the "government of service" until at least the budget is passed by December 31. He warned that calling elections any time before 2019 would expose Italy to undue risks of a decelerating economy. Recent data shows the economy likely decelerated in the first quarter, and survey-based indicators suggest weakness carried over into the second quarter.

Clearly frustrated President Mattarella has tried for weeks to break the impasse that resulted after Italians gave the centre-right coalition 37 percent, the anti-establishment 5-Star Movement 32 percent, and the ruling Democratic Party its worst result in history with 19 percent.

Various proposals for alliances failed, primarily after the right-wing League refused to split with former Premier Silvio Berlusconi's Forza Italia to enter into a coalition with the Five Stars.

Five-Star leader Luigi Di Maio vowed Monday he would never support a technical government and repeated his call for an election as early as June.

Mattarella said that would be impossible. He said elections over the summer would be impractical because so many Italians would be on vacation, and risky in the fall because there might not be enough time to approve the annual budget.

Pitching for a neutral government that could lead until December, he said Italy needed a functioning government immediately because of pressing European Union decisions coming up in June over the EU budget and immigration matters. And he said the current caretaker government of Premier Paolo Gentiloni had run its course after the Democrats lost their majority.

"The parties have repeatedly asked for more time to try to find an agreement," Mattarella said after a day of final, last-ditch consultations. "In the meantime lacking an agreement, I hope they will agree via a confidence vote to give birth to a neutral government. A government of service." (With Agency inputs)

(The above story first appeared on LatestLY on May 08, 2018 09:03 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).