Oct 17, 2014 | 09:02 GMT

4 mins read

Bulgaria Struggles to Form a Parliamentary Coalition

Bulgaria's GERB Party Struggles to Form a Coalition

Bulgaria's Oct. 5 parliamentary elections brought forth a new set of challenges for the country. The center-right party Citizens for European Development of Bulgaria (GERB) won 32 percent of the popular vote and 84 of the parliament's 240 seats. These results have forced the party to look for partners across the political spectrum. On Oct. 16, GERB announced that it would form a government with the Patriotic Front, an alliance of two nationalist parties. However, it will need additional partners if it wants to have a majority in parliament.

A succession of weak, unstable governments has plagued Bulgaria since early 2013, when a GERB-led government resigned after protests over utility prices. In the Oct. 5 elections, corruption scandals and a banking crisis contributed to voters' anti-establishment sentiments, resulting in a loss for the ruling Socialist-led coalition and a relatively strong performance for smaller parties. Creating a coalition dependent on the continued support of small parties will pose a challenge for Bulgaria's stability as the country faces a banking crisis and significant decisions regarding its energy future, including the fate of Gazprom's South Stream pipeline project

The Patriotic Front is a new alliance that won 7.28 percent of the popular vote and 19 seats in Bulgaria's parliament in the Oct. 5 elections. It was formed earlier this year through an agreement between the Bulgarian National Movement and the National Front for the Salvation of Bulgaria. Both parties have a populist, nationalist platform and are known for anti-minority and often racist views. Although talks between the Patriotic Front and GERB have led to an official agreement under which the Patriotic Front would support a GERB-led government, there are still some policy areas, such as taxes, pension reforms and energy, in which the parties have yet to find common ground. Nevertheless, the Patriotic Front has already announced that it will support GERB candidates for the posts of prime minister and chairman of the National Assembly.

On Oct. 15, GERB representatives met with the leaders of the Reformist Bloc, a new alliance of several center-right parties that stand close to GERB ideologically on many policy issues. A coalition comprising GERB, the Patriotic Front and the Reformist Bloc would have a majority in parliament. The Reformist Bloc has expressed willingness to partner with GERB in a coalition, but only if Boyko Borisov — a former prime minister and GERB's leader — is not named prime minister. For GERB, which Borisov founded in 2006, this is an unacceptable demand. Nevertheless, members of the Reformist Bloc have indicated that they are open to continued talks and a potential compromise.

Bulgarian Parliamentary Election 2014

Bulgarian Parliamentary Election 2014

If GERB fails to come to an agreement with the Reformist Bloc, the government will struggle to find another party with enough votes to give the GERB-led coalition a parliamentary majority. Talks with GERB's rival, the Bulgarian Socialist Party's Bulgarian Left coalition, predictably failed. The Movement for Rights and Freedoms, which holds 38 seats and gets most of its support from Bulgaria's ethnic Turkish minority, probably would not want to join a coalition in which the nationalist Patriotic Front is a member.

GERB's coalition talks come as Bulgaria is facing a confluence of challenges. A bank run in June led Bulgaria's central bank to take control of the country's fourth-largest bank, Corporate Commercial Bank, and freeze access to accounts. The central bank's actions and subsequent failure to make a decision regarding the fate of the bank and its deposits have led to weekly protests and an Oct. 14 attempt by depositors to storm the troubled bank's headquarters. Bulgaria's handling of the Corporate Commercial Bank crisis also triggered an EU investigation, with the European Banking Authority assessing whether the lack of access to Corporate Commercial Bank deposits following the state's intervention constituted a violation of EU deposit-guarantee laws. Interim Finance Minister Rumen Porozhanov said Oct. 15 that decisions on the future of the bank and compensation payments would be made in November, but uncertainty over the composition and stability of the new government puts these plans in jeopardy.

The coalition talks are taking place as Bulgaria's leaders must make significant decisions in the realm of energy. On Aug. 1, the outgoing Socialist-led government approved an agreement between the state-owned Kozloduy Nuclear Power Plant and U.S.-based firm Westinghouse to build a new reactor, but the final agreement is subject to approval by the next government. Under the terms of the deal, Westinghouse would have a 30 percent stake in a project to build a new 1,000-megawatt reactor and would provide the designs, equipment and nuclear fuel for the project. Bulgaria, like the Czech Republic, Finland, Hungary and Slovakia, depends entirely on Russia for nuclear fuel. The deal with Westinghouse would help Sofia diversify away from Moscow.  

Meanwhile, although EU concerns led Sofia to suspend work on the Russia-led South Stream pipeline project, Bulgaria does have an interest in seeing the pipeline built: The project would bring much-needed investment and job opportunities. Thus, regardless of its composition, the new Bulgarian government will face the perennial challenge of appeasing both the European Union and Russia.

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