Bulgaria Faces Early Election
By Neil Buckley in London and Theodor Troev in Sofia
The Financial Times
Bulgaria is facing a caretaker government and early elections after the centre-right administration of Boyko Borisov resigned following nationwide protests that turned violent.
The surprise resignation came after some of the largest demonstrations in the EU's poorest member since the collapse of communism two decades ago.
Clashes with police in the capital, Sofia, on Tuesday night left 14 people injured as protesters threw stones and firecrackers and smashed windows.
The upsurge in violence apparently prompted the snap resignation decision by Mr Borisov, one-time bodyguard to the former Communist leader Todor Zhivkov. He had insisted as late as Tuesday that he would continue in power until July 7 elections.
Bulgaria becomes the latest European country to see its government swept away by a backlash against austerity. Unlike neighbours such as Greece, Romania and Serbia, however, it has not been forced by the conditions of an international bailout to carry out a painful fiscal adjustment.
Protests in the country were prompted by stagnant growth and wages, the lowest in the EU, eroded by rapidly rising heating bills that prompted demonstrators to call for power companies to be renationalised as well as the government's resignation.
The departure of Mr Borisov's cabinet, expected to be confirmed by parliament on Thursday, plunges the 7m-strong country into months of uncertainty. With the main political parties indicating they would not form a new government, president Rosen Plevneliev is likely to name a technocratic caretaker administration, and bring forward July's parliamentary poll to April or May.
Mr Borisov's resignation appeared a gamble that his Citizens for the European Development of Bulgaria party, known by its Bulgarian initials as Gerb, might be able to rebuild popularity in time for the elections.
"I cannot stand looking at a bloody Eagles' Bridge," said Mr Borisov, referring to a busy Sofia intersection where Tuesday night's clashes took place. "I do not build roads so that blood is shed on them."
Gerb and the rival socialists have recently been neck and neck in opinion polls, but the governing party's popularity may have been further eroded by the police reaction to the protests.
"Apparently Borisov is trying to save the political capital he still has, and this was the reason for his resignation," said Daniel Smilov, an analyst at the Centre for Liberal Strategies think-tank in Sofia. "I am not sure this will be a successful strategy, but he is a very skilful communicator."
Calling for rapid elections, Sergey Stanishev, the socialist leader, insisted his party would deliver a "new social and public contract for Bulgaria".
Mr Borisov on Monday jettisoned his finance minister, Simeon Djankov, in an attempt to appease the demonstrators. A former World Bank economist, Mr Djankov's efforts to preserve Bulgaria's fiscal discipline won international plaudits but made him unpopular at home.
The premier on Tuesday pledged to cut electricity prices. He also said he would strip CEZ, the Czech state-controlled utility that supplies power to 2m Bulgarians, of its Bulgarian licence, threatening a potential diplomatic row with Prague.
Cutting energy prices is likely to be a focus of the election campaign. Bulgaria last year cancelled a planned Russian-led nuclear reactor project at Belene amid spiralling costs and questions over its viability.
But it won a gas price cut from Russia's Gazprom even while promoting efforts to exploit domestic gas reserves onshore and in the Black Sea.
Bulgaria's energy regulator on Wednesday appeared to be backing away from the threat to strip CEZ of its licence, and said it had received no proposal to reduce power prices despite Mr Borisov's pledge.
The regulator gave CEZ, which has denied any wrongdoing, until April to deal with any alleged violations of rules, and said it would hold a review then.
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