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WSJ: Bulgarian Government Resigns Amid Protests

Views on BG | February 20, 2013, Wednesday // 16:48| Views: 1423 | Comments: 0
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Bulgaria: WSJ: Bulgarian Government Resigns Amid Protests The breaking news about Borisov's resignation came in the aftermath of large-scale protests across the country against high utility bills, leading to clashes with riot police with many injuries and vandalism. Photo by BGNES

The Wall Street Journal

By JOE PARKINSON

The European economic crisis felled its latest political victim on Wednesday as Bulgaria's government resigned from office after days of nationwide protests against austerity, high electricity prices and official corruption."We have dignity and honor. It is the people who put us in power and we give it back to them today," Prime Minister Boyko Borisov told parliament in an announcement that shocked Bulgarians even after days of swelling protests.

Mr. Borisov said the threat of protests turning violent spurred his decision. "I cannot stand looking at a bloody Eagles' Bridge," he said, referring to the iconic intersection in downtown Sofia that was the scene of clashes between police and protesters on Tuesday. "Every drop of blood is a shame for us."

Bulgarian President Rosen Plevneliev is now likely to seek to form a caretaker government to administer the country and will probably propose to bring forward national elections to sometime in the spring, analysts said. Mr. Plevneliev's office said in a statement on Wednesday that the president had canceled all meetings on his agenda and would comment on the resignation on Thursday. Mr. Borisov said his Citizens for the European Development of Bulgaria, or GERB, wouldn't be a part of that administration.

The leader of Bulgaria's main opposition Socialist Party was quick to attack Mr. Borisov's outgoing administration, labeling the prime minister's decision "panicked and desperate."

"Borisov knew that if he had not resigned, he would have been swept away by the protests ever gaining in momentum," Sergey Stanishev said in comments to reporters.

The toxic political atmosphere and dramatic collapse of the government could prolong efforts to form a caretaker government because the president's office has had little time to consider that option, analysts said.

The news casts some doubt over Mr. Borisov's last act in office: a Tuesday vow to cut energy prices by 8% and to revoke the license of the local unit of Czech power company CEZ AS BAACEZ.PR -1.10% after prosecutors earlier said they were investigating allegations of "systematic violations" of public-procurement rules. Bulgaria's energy-market regulator said in a statement on Wednesday that it was launching a review of local business practices of CEZ, but no final decision on the company's business license be made before April.

Analysts said that energy companies could be in the firing line of the next government because the coming election campaign will focus politics on the energy sector.

"To reduce prices, the next government will face pressure to renationalize power utilities and retroactively cut renewable-energy subsidies; an acute risk we will watch in coming weeks," said Otilla Simkova, an analyst with political risk consultancy Eurasia Group.

Voter anger at austerity measures has toppled governments across Europe. In the central and eastern part of the continent, governments have collapsed as voters burdened by economic hardship have become less tolerant of political corruption once seen as unavoidable.

After at-times violent protests against government spending cuts and alleged corruption, Romania changed its prime minister twice last year. The center-right was voted out in favor of Socialists in Slovakia, while austerity-weary Lithuanians also voted out fiscal conservatives in favor of their opponents. Slovenia's prime minister is trying to hang on at the helm of a minority government amid mounting protests there over austerity and corruption.

Mr. Borisov, a former bodyguard to Soviet-era dictator Todor Zhivkov, had seemed relatively immune until recent months, in part because he froze salaries and pensions rather than cutting them.

Hewing to a tight fiscal policy and navigating the crisis without taking a foreign bailout, Bulgaria has stood as one of the European Union's fiscal bright spots, comparing favorably with its regional peers Hungary and Romania, which have both needed international rescue packages and have been plagued by steeper recessions and political turmoil.

But the popularity of the prime minister and his center-right government has collapsed in recent weeks amid swelling protests and a series of scandals that snared government officials. On Monday, he pushed out his pro-austerity finance minister, Simeon Djankov, in an effort to mollify critics, and on Tuesday the government moved to cut electricity prices and revoke the license of the country's largest foreign-controlled power supplier.

But the government's moves didn't satisfy protesters, who braved temperatures below freezing to take to the streets again on Tuesday night. Some protesters in Sofia waved Bulgarian flags. Others carried candles. The crowd accused the government of corruption, chanting "Mafia." Tuesday's protests, which erupted across the capital, saw 25 people arrested and 14 injured, according to Bulgarian state media.

Many Bulgarians are deeply unhappy over high energy costs, power monopolies, low living standards and corruption in the EU's poorest country.

Political analysts cautioned that the government's resignation comes amid a deeply polarized political atmosphere, which could frustrate a new administration's ability to govern as Bulgaria endures a lingering economic crisis.

"My main worry is that there are no clear alternatives at the moment. The fear is that we may have a fragmented new parliament and strengthening of populist parties which could put the governability at risk," said Daniel Smilov, program director at the Center for Liberal Strategies, a Sofia-based think tank.

"There are not too many immediate problems but long-term, the situation is not good," he said.

Although outside the euro zone, Bulgaria is overwhelmingly dependent on the bloc's larger economies for growth. The country won admiration from Brussels by reducing its budget deficit to 0.5% of gross domestic product last year from 2% in 2011. The economy managed a 0.5% expansion in the fourth quarter from a year earlier, marking its 10th successive quarter of growth.

But opinion polls in recent months have shown a precipitous decline in the ruling party's ratings.

A lead of 15 percentage points last year over its nearest rival, the Bulgarian Socialist Party, has evaporated in recent months, seeing GERB fall to the same level as the Socialists, according to recent polls.

On Wednesday afternoon a small group of government supporters gathered outside the capital's Council of Ministers to petition Mr. Borisov to reconsider his resignation. Many carried Bulgarian flags and chanted "we want Boyko."

"I will stay here every day until the government is reinstated," said Znejena Koleva, a pensioner from Sofia. "We had food and stability, I don't know why this has happened."

Sean Carney in Prague contributed to this article.

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Tags: austerity, high electricity prices, official corruption, Prime Minister, Prime Minister Boyko Borisov, president, Rosen Plevneliev, Citizens for the European Development of Bulgaria, GERB, Socialist Party, Sergey Stanishev, CEZ
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