Bulgaria’s Government steps down – what’s next?

, by Ivan Yanakiev

Bulgaria's Government steps down – what's next?

As expected, the minority Bulgarian government resigned on the 23th of July, following months of political agony. Bulgarian Prime Minister Plamen Oresharski has announced in parliament the resignation of his left-leaning government.

Bulgarian government resigns

As expected, the minority Bulgarian government resigned on the 23th of July, following months of political agony. Bulgarian Prime Minister Plamen Oresharski has announced in parliament the resignation of his left-leaning government.

On July 24th, cabinet members arrived at the Council of Ministers for what is expected to be their last session before Prime Minister Plamen Oresharski steps down. Earlier this month, Oresharski picked July 23th as the most suitable date for the government to submit its resignation. However, ministers have repeatedly sent mixed signals as to when this could happen.

Defense Minister Angel Naydenov, who is also a high-ranking official of the main ruling Bulgarian Socialist Party (BSP)said that the cabinet was to resign at the earliest on Thursday, the 24th of July. Other ministers commented that they had no information of the exact date. Interior Minister Tsvetlin Yovchev explained it was up to the Prime Minister to announce the move. ‘The only thing halting the resignation is the necessity that all processes after the resignation of the government should be directed and that stability of governance and the holding of elections be guaranteed’, Yovchev added.

The Socialists ruled with the ethnic Turkish party DPS in a minority coalition which relied on the outside support of the nationalist Attack party to cling to power and survive repeated no-confidence votes while in office. For instance, hundreds gathered in the Bulgarian capital as news of the resignation broke, chanting ‘victory’, as two lines of police looked on in front of the parliament building.

Wednesday, the 23th of July, also marked the first anniversary of an eight-hour siege of parliament by protesters demanding the government’s resignation. Hence, the leader of the centre-right opposition party GERB, Boyko Borissov, wrote on his Facebook wall: ‘Such a belated resignation, and knowing what ruin they leave behind, I could not even enjoy it.’

Oresharski’s resignation opens the way for early parliamentary elections, likely to be held on October 5th. Party leaders have already agreed on the date, which now has to be formally announced by the Bulgarian president.

Banking crisis unresolved

Bulgaria’s Prime Minister Plamen Oresharski stood down, leaving his successor to sort out the Balkan state’s worst banking crisis since the 1990s with the fate of its fourth largest lender – Corporate Commercial Bank (KTB) – undecided.

The Socialist-led coalition increased the minimum wage, worked to cut red tape for businesses and found investors for a 1.5 billion euro (2 billion US dollars) sovereign bond last month despite the banking crisis. But Oresharski’s tenure was overshadowed by months of street protests against corruption, deadly floods that hit the Black Sea city of Varna in June and a standoff between Brussels and Moscow over a Russian-led gas pipeline project.

Earlier, protesters threw tomatoes at a government building, according to local media reports. The government stands down with no consensus in sight about how to rescue KTB and protect its clients after they had rushed to draw money from the bank`s accounts in June.

Furthermore, the Central Bank governor wrote to parliament offering to step down, saying that he would not let the Central Bank be used as a political ‘toy’ after repeated attacks on the institution regarding the case with KTB.

Hence, more debt depositors unnerved by reports of shady deals by the bank’s main owner together withdrew more than a fifth of deposits in a week-long banking rush. The proprietor, who was locked in a public feud with a business rival at the time, has denied any wrongdoing and claimed the run to have been a plot hatched by his competitors. The run prompted the Central Bank to seize control over KTB for three months, block depositors from taking out their money and commission an audit. Panic spread to another lender, forcing the Bulgarian government to free up an emergency credit line for its banking system.

Sofia has estimated the state bail-out cost at about 1.5-2 billion levs (1.4 billion US dollars). Bulgarian authorities have pursued various options to rescue KTB, including hiving off its healthy assets and liabilities into a subsidiary, which would then open as a nationalised bank under a new name. But lawmakers rejected that rescue package, making a resolution unlikely before parliament dissolves in August.

Bulgaria does not get to nominate EU Commissioner

The Bulgarian cabinet resigned without nominating an EU Commissioner as the government failed at its last session to nominate a Commissioner, leaving this task to the caretaker cabinet.

Reportedly, the Prime Minister Plamen Oresharski refused to nominate Kristian Vigenin, the incumbent Socialist Foreign Finister, as Commissioner. On the other side, Sergei Stanishev, the outgoing leader of the BSP (Bulgarian Socialists Party), who is also President of the Party of European Socialists (PES), was believed to be a candidate for Commissioner himself, but he said that his work for the PES was more important and that he would seek re-election in the autumn of 2015. Following a disastrous European election for his political force, Stanishev has recently resigned from the leadership of the BSP and is currently an MEP.

In contrast, Bulgaria’s ethnic Turkish DPS party will most likely support the candidacy of the outgoing EU Commissioner Kristalina Georgieva, the current Bulgarian Humanitarian Aid Commissioner, for the position of High Representative of the Union for Foreign Affairs and Security Policy. ‘While Kristalina Georgieva stands a chance of becoming EU’s next foreign policy chief, it is the party’s responsibility to support her’, Lyutvi Mestan, leader of the Movement for Rights and Freedoms (DPS).

In contrast, the centre-right opposition GERB (Citizens for a European development of Bulgaria) of former Prime Minister Boyko Borissov, which according to polls is expected to win the next elections, also strongly backs Kristalina Georgieva to be part of the team of Jean-Claude Juncker. In the meantime, a caretaker cabinet is expected to be appointed by the President Rossen Plevneliev, who is also backing Georgieva.

Therefore, it seems pretty sure that Georgieva will commissioner, but her portfolio will have to be negotiated before EU leaders meet again for an extraordinary summit on top jobs on August 30th.

This article was first published on Cosmopublic.eu

Your comments


Warning, your message will only be displayed after it has been checked and approved.

Who are you?

To show your avatar with your message, register it first on gravatar.com (free et painless) and don’t forget to indicate your Email addresse here.

Enter your comment here

This form accepts SPIP shortcuts {{bold}} {italic} -*list [text->url] <quote> <code> and HTML code <q> <del> <ins>. To create paragraphs, just leave empty lines.

Follow the comments: RSS 2.0 | Atom