ROME - Italian President Giorgio Napolitano, sworn in Monday for an unprecedented second term in the country's history, urged political parties to form a coalition government and carry out reforms.

There was a need for different political forces to form an alliance able to offer solutions to shared problems, Napolitano, a member of the former Italian Communist Party who took a pro-US and pro-Europe line, said after his swearing-in ceremony in parliament.

Italy's newly re-elected president Giorgio Napolitano waves at the end of his speech at the lower house of the parliament in Rome, April 22, 2013. [Photo/Agencies]

"The fact that in Italy there is a sort of widespread horror for any hypothesis of entente, alliance, mediation or convergence among different political forces is sign of a regression," he said.

Napolitano opted for a cross-party pact in late 2011 when he appointed outgoing Prime Minister Mario Monti at the helm of a caretaker government amid a spiraling debt crisis.

The center-left Democratic Party (PD), the main group in parliament, the center-right People of Freedom (PdL) and Monti's centrist Civic Choice asked the 87-year-old president to have a second term after they failed to form a new government and elect a successor to him.

Napolitano, who previously ruled out the possibility to stay on, said he finally decided to accept the appeal given the seriousness of Italy's economic and social emergency.

He said he would carry out this "difficult test" of his strength if parties "take their responsibilities" in abandoning divergences to enact much-needed laws.

The president said parliament's inability to reform Italy's electoral law, which he had repeatedly asked to change to produce a hung parliament, was "unforgivable".

Italy should meet its obligations on finances to help stabilize the eurozone, Napolitano said, adding that the country's political parties had damaged progress made by Monti's technocratic cabinet.

Napolitano, who plans to start consultations Tuesday to discuss the formation of the next government, is expected to name a new prime minister to lead a coalition government able to carry out urgent economic and institutional measures.

Political observers say the PD will back a so-called "government of the president", also supported by its main opponent PdL along with Civic Choice and other forces.

It could have a limited mandate to pass some key reforms, such as a new electoral law, and is expected to include institutional figures as well as politicians unlike the outgoing executive of technocrats.

Napolitano will have to face the hard task of brokering solutions to create a broad coalition able to quickly introduce some necessary reforms to tackle the deepening economic crisis, observers say.

The new government is expected to comply with suggestions from a 10-member panel of experts that the president appointed last month to help break the stalemate.

Italy's political parties were unable to form a new government after the Feb 24-25 national elections.

The PD, which refused to consider an alliance with the PdL led by former prime minister Silvio Berlusconi, failed to reach out to the anti-establishment Five-Star Movement that holds the balance of power in the Senate.