Bankruptcy graveyard in Italian election battleground

It is a pitiful sight: items seized from bankrupt companies fill this warehouse in Lombardy, a key swing region in the general election, where recession-hit citizens' votes count more than most. Albino Bertoletti does not work in a funeral home, but he still sees death of a kind on a daily basis: he specialises in auctioning off objects seized from businesses which succumb to the crisis. "Usually people see living companies, but here we see the dead ones," he said. Watching the agonising demise of a historic business or art gallery can be very disturbing, he said, but "it's like being a surgeon, you get used to it." The recession -- the longest in Italy for 20 years -- has not spared industrial Lombardy, a family business heartland, which represents 21 percent of the national Gross Domestic Product (GDP) alone. The number of bankruptcies rose by almost half in 2012 and "this year will be worse," Bertoletti said as he surveyed the towering boxes in his warehouse. Thousands of pieces of furniture, photocopiers, cars, works of art and even clothes lie forlornly in the chilly silence: all sorts of things have ended up crammed inside the vast depots, from funeral urns to piles of climbing shoes. In the gloomy depths of the basement underneath the warehouse lie some 18,000 cardboard boxes containing archives of bankrupt companies, which must be conserved for 10 years under Italian law and are constantly growing in number. First companies and wholesalers caved, now factories are following suit, said Bertoletti, though smaller businesses are the worst hit. The election on Sunday and Monday may be key to Italy's future, but it has a special importance in Lombardy, which will hold regional ballots as well.The previous governor, a member of Silvio Berlusconi's centre-right People of Freedom party (PDL), resigned in October amid accusations of pocketing millions of euros (dollars) in presents and holidays in exchange for favours. The scandal hurt the PDL and its ally, the anti-immigrant Northern League party, and many voters in this historically centre-right stronghold say they are now switching to back the centre-left or the populist Five Star Movement. However, turmoil at Italy's Monte dei Paschi di Siena -- the country's third biggest lender -- could harm the left because of its close ties with the bank and boost support for the League. Italian election expert Roberto d'Alimonte said the region was a "mix of Ohio and California" for its key role in the election campaign. No party will be able to govern without winning control of the Senate as well as the lower house -- and as Lombardy has more Senate seats than other regions, its votes are decisive. The outcome could also seal the fate of Prime Minister Mario Monti, who is currently trailing in fourth place at the head of a centrist coalition. The front-running centre-left Democratic Party (PD) is expected to win in the lower house, but if Lombardy votes for the right, the PD will need to ally with Monti to form a majority, and he could snap up a key role in government. "This election will be one of the most important in the history of the Italian Republic because of the difficult situation the country is in," said Alberto Barcella, head of Italy's business lobby Confindustria in Lombardy. "Our country has to bring about a miracle by combining an austerity policy for the public accounts with a growth policy to boost domestic consumption. "Italy's real problem today is weak demand, as well as competitiveness. And they are two things which are difficult to reconcile," he said. In January, Confindustria presented politicians with a catalogue of reforms proposals. Italy, it said, is in a state of "economic and social urgency" and the eurozone's third largest economy needs "shock therapy". Andrea Perini, head of a small company selling office furniture in Lombardy, said that whoever wins, things must change soon or his business will go under. "If things continue as they have been in the first two months of the year, we will forced to close for sure," he said in a showroom along Milan's canal. Perini said he had inherited the company from his father and it has been through a lot -- including the destruction of its premises by Allied bombs in 1943 -- but it had never been laid as low as by the current financial crisis. His main complaints are excessive bureaucracy, the difficulty in obtaining business loans and an "unjust and shameful" tax system. Lombardy votes may be key to shaping the future government, but Perini dismissed the election as "creating even more confusion". "People are undecided, disorientated. They are afraid to buy, they are worried about the future.