On Sunday, Bulgaria will vote in a general election for a fifth government in under two rocky years.
The vote could produce another fragile coalition that will have to battle corruption and revive growth in the eastern European state, report Reuters.
Led by a former bodyguard, the centre right GERB party is tipped to win but fall short of a majority. It could turn to smaller parties and also reach out to its main socialist opponents for support in passing legislation.
But there is widespread disillusion with the political class and Bulgarians are fed up with voting for the same faces again and again without their lives improving. Tens of thousands took to the streets last year to voice their anger. A further bout of political instability could keep the economy in the doldrums and leaders unable to push through reforms, such as raising the pension age, attract badly-needed foreign investment and solve a festering bank crisis.
“It is a stalemate situation and the problem is that we cannot see a light at the end of tunnel,” Borislav Ganev, 47, an engineer. “They promised new jobs, but we still have a serious unemployment rate. They promised economic growth and there is nothing like this. And we still have painfully low incomes.”
Bulgarians are the poorest members of the European Union and their wages and living standards still lag far behind the bloc’s average. The economy is expected to grow 1.5 percent this year, slower even than fellow 2007 EU entrant Romania at 2.2 percent.
More than half doubt the election will bring change
More than half doubt the election will bring change for the better, according to a poll by Gallup International in September. Some 70 percent are pessimistic about the future. “These are the third nation-wide elections in less than a year and a half,” the head of the Socialist party Mihail Mikov told Reuters in an interview. “There is a bit of tiredness and a bit of apathy. In the same time, our supporters are getting into form and the campaign is gearing up.”
Parties agreed on a snap election for October 5 following the collapse of a Socialist-led coalition, which lasted barely a year in office and whose term was overshadowed by street protests, deadly floods and a row over Russian energy supplies.
Ongoing political instability prompted ratings agency Standard & Poor’s to downgrade Bulgaria to one notch above junk in June, and GERB leader Boiko Borisov has warned a failure to form a government could leave Bulgaria in a crisis for years.
The chief executive of Unicredit Bulbank, the country’s biggest lender, said such instability was sapping the appetite of investors who could otherwise have profited from Bulgaria’s in-built advantages, such as its relatively cheap workforce. “The quicker we can position ourselves as a stable, predictable environment for doing business, the better,” Levon Hampartzoumian told Reuters Eastern Europe Investment Summit.
Top of the next government’s priorities is solving the country’s worst financial crisis since the 1990s, which saw two large banks hit by runs on deposits in June. One of them, Corporate Commercial Bank (Corpbank), is still shut, pending an audit, and its main owner charged with embezzlement. Corpbank’s clients cannot get access to their deposits for three months, sparking waves of angry protests and a sharp rebuke from the European Commission.
higher energy prices to come?
It is still unclear whether authorities will end up rescuing the bank, probably with the help of taxpayer money, or let it collapse. A previous attempt to solve the crisis broke down in July and August as politicians squabbled over what to do. “The risk with fragile majorities is that they can be blown up very easily and indeed, undertaking serious reforms becomes difficult without the support of more political parties,” said Boriana Dimitrova of pollster Alpha Research. “Even if we get a fragile majority, on the most painful issues – the banking crisis, the financial problems, the pension reform, the healthcare reform – broad parliamentary and public support will be needed, rather than just the position of this majority.”
The new government may well have to keep energy prices higher to help fix the sector’s finances, which may spark more anger. Electricity bills eat a large chunk of Bulgarians’ household incomes, especially in the snowy winter months.
Heavily dependent on Russia for its energy supplies, Bulgaria is also one of the countries most vulnerable to a gas supply cut in the ongoing standoff between the West and Moscow over Ukraine.
The new government may also have to persuade parliament to let it raise more debt, in order to finance a higher-than-expected fiscal deficit and keep the banking system stable. “I am convinced that it is important to vote. But this time it is really difficult to make a choice because I see many familiar faces who lied us in recent years,” Dobromira Kotseva, a 51-year-old teacher. “I can easily predict another mass protests when the winter comes no matter what will be the composition of the government. Nobody is able to deal with these problems in the coming months.”