Bulgarian Lessons

Financial Times

The resignation of Bulgaria's government after violent protests is a warning for other European countries. Even amid signs that the worst of the eurozone problems and associated downturn may be past, in today's low-growth Europe, social unrest can break out with sufficient force to topple governments even in countries not directly hit by crisis.

The centre-right government of Boyko Borisov is seen as another casualty of "austerity". Yet Bulgaria has not suffered especially severe austerity measures, in the sense of painful fiscal tightening. Unlike neighbours Greece, Romania and Serbia, it has not required an international rescue.

Unemployment, though growing, is not high by standards elsewhere on the continent, at 12 per cent. Public finances, notes one market analyst, are "stellar". The country until recently prided itself on being an island of relative economic stability in the Balkans.

But it was the government's failure to deliver growth, in output, and in wages that remain the EU's lowest – coupled with rising prices, above all of heating – that sparked the recent mass protests. Underlying disillusionment with a political elite seen as cronyist and self-serving bubbled up as monthly household electricity bills hit €100 – against an average monthly wage of €387.

Mr Borisov deserves credit for stepping aside without risking further violence. With early elections now likely, all parties should commit to staying strictly within the rules. The challenges to constitutional law and democracy that emerged in neighbouring Romania after protests forced a change of government last year must be avoided. With both main political forces in the electoral doldrums, however, the danger exists that radical parties will be the beneficiaries in a fragmented parliament.

Finding ways of reducing energy costs will be a dominant election theme. But one lesson from the government's implosion is that whoever takes power next must redouble efforts to stamp out corruption – which may have contributed to those high costs. Mr Borisov came to power in 2009 promising exactly that, but progress has been slow.

Another is that for all the EU focus on fiscal discipline, growth matters. Bulgaria comfortably meets the Maastricht criteria for euro entry, has pegged its currency to the euro since 1997, and avoided crisis. But that does not win votes. It is a lesson that governments even in wealthier states may yet learn to their cost.

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