Early parliamentary elections took place on 5 October - two years ahead of schedule - leading, early November, to the appointment of the fifth cabinet in almost 2 years. The previous feeble coalition resigned after months of street protests, the strong defeat of the major ruling party, the Socialist party BSP, at the European elections, and a political controversy as to the way of managing the US and EU willingness to have Bulgaria stop the South stream pipeline construction in the framework of the sanctions on Russia. Polls results were very fragmented and inconclusive. In addition, polls registered the lowest turnout since the detachment from the Soviet bloc, demonstrating the population’s disillusionment vis-à-vis the political class. The need for a rapidly operational coalition has prompted the emergence of the centre-right GERB party, which had comfortably won the elections, in coalition with its most logical partner, the rightist Reformist Party RB. However, the GERB-RB will fall short of majority and will need the support of two additional parties, i.e. the leftist ABV party and the nationalistic Patriotic Front, which signed partnership declarations with GERB. GERB’s Borisov will be at the helm of the executive power for the second time. His previous government collapsed in February 2013 amid massive and violent protests when the energy bills showed large price hikes.
Impact on country risk
The appointment of a minority ruling coalition does not bode well for stability on the political scene. What is more, animosities between personalities of the two constituting parties could hamper a smooth negotiation process. As far as the political agenda is concerned, the GERB-RB administration should stick to a policy aiming at fiscal stability, favour the implementation of pro-business and pro-investment measures and have a pro-western orientation. In the short term, the new executive will have to tackle the consequences of the bankruptcy of Corpbank, the fourth largest bank in the country, which lost its licence from the central bank early in November and whose depositors’ accounts, among which many public companies, have been blocked since June and are expected to incur losses.
Analyst: Florence Thiéry, email@example.com