Borisov's Political Honeymoon Ends
By Vesselin Zhelev
Seven months after rising to the helm amid great expectations, the government of Bulgaria's populist prime minister, Boyko Borisov, is rapidly losing popularity due to economic woes, broken promises and increasingly vociferous criticism.
Its rating has plummeted by 13.3 percentage points to 45.7 percent since it took office last August, according to the Sofia-based Alpha Research Agency.
Mr Borisov, 51, a charismatic former bodyguard, and his centre-right GERB party surged to power on pledges to stamp out crime and corruption and improve living standards. His delivery however remains questionable.
The quality of life in Bulgaria remains miserable after three years of EU membership – the country is the bloc's poorhouse with 38 percent of its average GDP per capita. It is still failing to fully benefit from EU financial aid. A campaign to hunt down corrupt officials and organised criminals has produced many arrests and much media hype but no convictions.
At the same time, the economy is stagnating, unemployment is rising, budget revenues are falling and spending bills are soaring, leaving the cabinet with an unexpected fiscal gap and a possible default on another promise - that Bulgaria join the euro within three years.
Tough talking Borisov, a karate black belt, never misses an opportunity to blame his troubles on his predecessors and opponents, a Socialist-led coalition also including ethnic Turks and Liberals that was very much criticised for mismanagement and corruption. Investigations launched by the Borisov government led to three of the previous government's ministers facing charges of misuse of power and funds.
GERB has also mounted a bid to unseat President Georgi Parvanov, a Socialist and sharp government critic. The impeachment procedure, observers say, is likely to sail through parliament but crash in the constitutional court, which has the last word.
"People are happy to see gangsters handcuffed and former ministers prosecuted", Stefan Stoyanov, a Sofia jobless, told this website. "But this is not enough. What most Bulgarians want is to finally start living like other Europeans."
Elmar Brok, a leading German member of European Parliament, is pleading for patience: "We believe Borisov's government is on the right track. You can't expect final results in half a year and make a fair judgement," Mr Brok said. His Christian Democrat party is a key European ally of Mr Borisov.
Bulgaria has won praise from Brussels for its healthy public finances under Mt Borisov. Finance minister Simeon Djankov, a former World Bank economist, has managed to keep the 2009 budget deficit under one percent of GDP. However, he achieved that by delaying payments to state contractors, doctors, social assistance beneficiaries and even to President Parvanov at the end of last year.
At the sidelines on an EU summit on Friday (26 March), Mr Borisov acknowledged his government had still to pay the public procurement contracts worth €1.8 billion that its predecessors signed with hundreds of firms. "If we don't annul those contracts, they will make us a state like Greece, which has lied both to Brussels and its own people," he said, alluding to Greek statistics concealing an excessive budget gap.
Paying the outstanding bills could increase Bulgaria's deficit to 6-7 percent of GDP, Mr Borisov said. "That means 'game over' for our euro bid." On Saturday, the Bulgarian Focus news agency quoted him as urging prosecutors to declare the unpaid contracts illegal.
Mr Borisov has cut public sector wages by ten percent and capped pay for state-owned company officials to the equivalent of €1,6000. But he has caved into public discontent and put several overdue social sector reforms such as the closure of inefficient hospitals or a higher retirement age on ice.
Bowing to a street protest by less than 2,000 tax, police and army officers, he also dumped a project to make some 150,0000 state employees pay health and pension contributions. Earlier, the government had already scrapped a plan to raise health contributions from six percent to eight percent of the salary.
Instead, the cabinet proposed a new "luxury tax" on purchases like cars with engines of more than 150 horse power, apartments larger than 230 square metres, yachts and bank deposits worth more than €70,000. It also proposed to hike Bulgaria's flat-rate value added tax by two points to 22 percent despite its earlier pledges to gradually cut it to 16 percent by the end of its term in 2013.
Mr Borisov's predecessor, Socialist Sergei Stanishev, has chastised him for "killing the real economy by fiscal austerity", draining the source of budget revenue. "Government revenues have dropped by 33 percent since January and its spending has increased by more than 20 percent, " Mr Stanishev said. "We have 1,300 new jobless every day. This is a policy which distances Bulgaria from Europe."
The country's unemployment has risen to 10 percent, the economy contracted by 5 percent last year and is expected to grow by a meagre 0.3 percent this year.
Lukewarm reaction from Brussels
The European Commission, for its part, recently poured cold water on Mr Borisov's main pride - a campaign to crack down on organised crime and high-level corruption.
While calling his efforts "laudable", a commission monitoring report noted: "No convictions in high level corruption cases have been reported since July 2009. Organised crime cases in court have generally shown little development since mid-2009 and no convictions have been reported in this period."
The EU has cleared Bulgaria's access to €11 billion in aid earmarked for it until 2013 but has warned the country is absorbing the funds too slowly.
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