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Bulgaria

Bulgaria’s Borissov (and EU) gets reprieve from dissatisfied voters

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Leading EU officials will be relieved that Boyko Borissov is likely to begin a third stint as prime minister, but Bulgaria faces lingering concerns about its economy and corruption. (Facebook)

It’s been nearly two-and-a-half years since the last election, but Bulgarian prime minister Boyko Borissov’s center-right party won just about the same percentage of the vote that it did in 2014 — around 32.7%. 

That performance was good enough for an 11-seat increase in the National Assembly (Народно събрание), making Borissov more likely than not to retain the premiership. It’s a remarkable turnaround after Borissov, dogged by allegations of corruption within his government and after his party suffered a humiliating defeat in last November’s presidential election, resigned earlier this year and triggered snap elections.

If he can form a governing coalition, it would be Borissov’s third non-consecutive stint as prime minister, his first coming in the aftermath of the global financial crisis in 2009. At a time when Russian president Vladimir Putin is working to undermine European democracy, top European leaders and EU officials alike view Borissov as a soothing center-right ally firmly devoted to European integration. EU leaders will certainly far prefer a Borissov government with Bulgaria set (for the first time) to assume the six-month rotating EU presidency in early 2018.

As both an EU and NATO member, Bulgaria is a key ally on the eastern periphery of the European continent. It’s a northern neighbor of the economically depressed Greece and the increasingly autocratic Turkey and just across the Black Sea lies a divided Ukraine and Russian-annexed Crimea. These days, it’s an increasingly tough neighborhood. Despite European anxieties about reliance on Russian natural gas, Borissov last year was already considering the resurrection of the on-again, off-again South Stream gas pipeline from Russia (talks began in 2006, but ended after Borissov won the 2014 election), even as the country’s new president called for better relations with Russia. While the number of ethnic Russians in Bulgaria is negligible (far less than ethnic Turks, which comprise nearly 9% of the population), a large majority of Bulgarians belong to the Orthodox church, sharing important cultural touchstones with Russia.

Earlier this year, voters seemed likely to punish his party, the center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България) for years of economic malaise and widespread corruption. GERB’s presidential candidate last November, Tsetska Tsacheva, the former chair of the National Assembly, lost a second-round runoff by a 23% margin to Rumen Radev, an independent and former Bulgarian Air Force commander endorsed by Bulgaria’s center-left.

At the time, coming days after Donald Trump’s successful, if once implausible US presidential campaign, Radev’s victory was yet another incremental geopolitical victory for Russian president Vladimir Putin, given Radev’s call for closer ties with Russia. Indeed, Tsacheva’s defeat was the proximate cause for Borissov’s resignation.

Instead, after the March 26 elections, GERB won 95 seats, the largest bloc in the National Assembly. Continue reading Bulgaria’s Borissov (and EU) gets reprieve from dissatisfied voters →

Bulgaria

Bulgaria election results: Borissov returns to power after 1.5-year break

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Pity poor Bulgaria. It has the lowest GDP per capita of the entire European Union (around $7,300). It has lost over 19% of its population from its 1988 peak. It is now struggling through the latest European financial crisis with a series of revolving governments, low economic growth and an unemployment rate that today is still over 11%.bulgaria flag

So when Bulgarians voted on Sunday to elect yet another government, they did do so with the same kind of ennui that’s marked so many of the country’s recent, frequent elections and a sense of hopelessness as the country’s youngest, brightest minds look to Germany, London and elsewhere for work.

Boyko Borissov (pictured above), a former center-right prime minister between 2009 and May 2013, is set to return to the office he once held, following a technocratic, center-left government headed by former finance minister Plamen Oresharski that fell in August. Bulgaria has since been governed by another caretaker, Georgi Bliznashki, who warned that Bulgaria’s next government needs to be strong enough to carry through major reforms to pull the country out of its ‘post-communist swamp.’

Borissov is the leader of the Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България), and his main opponent is the Coalition for Bulgaria (Коалиция за България), which is essentially a wider version of the center-left. Bulgarian Socialist Party (BSP, Българска социалистическа партия).

The Bulgarian Socialists won enough seats in the last election in May  to form a governing coalition with the  Movement for Rights and Freedoms (DPS, Движение за права и свободи), a liberal party that represents ethnic Turks and other Muslims.

Among the mounting problems that the government faced was the collapse of Bulgaria’s fourth-largest bank earlier this summer, Corporate Commercial Bank, which froze the accounts of 200,000 Bulgarians. Protests against the government last year failed to result in any substantive change.

This time around, however, they fell far lower, as GERB seemed headed to a clear victory. With just over 42% of the vote counted early Monday morning, GERB led by a margin of over two-to-one:

bulgaria2014

Bulgarians voted Sunday to elect all 240 members of the unicameral National Assembly (Народно събрание), and early results indicated that four new groups would enter the parliament, doubling  the number of parties from four to eight.

In fourth place, however, is a potential coalition partner for GERB, the Reformist Bloc (Реформаторски блок), formed in December 2013 as a liberal electoral bloc that, like GERB, lies on the center-right, that won attention in May’s European parliamentary elections when it won one of Bulgaria’s seats. Together, GERB and the Reformist bloc will hold nearly 45% of the seats in the National Assembly, depending on whether another small group, the Alternative for Bulgarian Development, remains above the 4% threshold needed for winning seats.

That means that Bulgaria’s next government is unlikely to be strong enough to effect the kind of massive reforms that could transform policy on a scale sufficient to stop the country’s economic, cultural and demographic hemorrhaging.  Continue reading Bulgaria election results: Borissov returns to power after 1.5-year break →

Bulgaria

Who is Plamen Oresharski?

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oresharski

The good news is that after months of uncertainty, Bulgaria has a new government.bulgaria flag

The bad news is that, in taking office, the new Bulgarian prime minister Plamen Oresharski warned his country that he wouldn’t make them rich and prosperous, but that he would work to ensure that over the course of his potentially four-year term in power, he would work to bring more hope and confidence that Bulgaria is ‘on the right track.’

Talk about lowering expectations.

After losing power in July 2009 just months after the global financial crisis, prime minister Sergei Stanishev and the center-left Bulgarian Socialist Party (BSP, Българска социалистическа партия) and its allies triumphed in the parliamentary elections earlier this month over his successor, Boyko Borissov and the center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България).

So within two election cycles, Bulgarians have swung from the left to the right and, having indicated their dissatisfaction with both, are turning to a modified center-left government, with Oresharski, a former finance minister leading a semi-technocratic government supported by the Bulgarian Socialists and the third-largest party in Bulgaria’s parliament, the Movement for Rights and Freedoms (DPS, Движение за права и свободи), a liberal party that represents ethnic Turks and other Muslims.

Oresharski served as finance minister in Stanishev’s previous government from 2005 to 2009 in a career that’s spanned working in Bulgaria’s finance ministry since the early 1990s.  As finance minister, he worked to lower the Bulgarian corporate tax rate to 10% in 2007 and then followed up with a flat-tax rate of 10% on all personal income in 2008.

As prime minister, Oresharski has appointed Petar Chobanov as his own finance minister.  Chobanov himself is not technically a member of the Bulgarian Socialists, though he led the finance ministry’s forecasting agency under Oresharski in the previous government.  Chobanov, like Oresharski, leans toward a conservative fiscal policy in a country that, unlike much of Europe, has a strong budgetary outlook — its public debt load is just around 18% of GDP.  Nonetheless, Bulgaria hasn’t escaped the stagnant economic conditions that have plagued the rest of Europe, with GDP growth of less than 2%, an unemployment rate of 12.6% as of spring 2013, and an aging, declining population that’s shrunk by nearly 1.5 million since the 1980s.  Bulgaria and its neighbor Romania remain the two poorest countries in the European Union.  Continue reading Who is Plamen Oresharski? →

Bulgaria

Bulgarian ennui leads to gridlocked result between Socialists, GERB

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After Iceland’s election last month, I pointed to a trend in European politics that I called the European three-step, which goes something like this:bulgaria flag

  1. Left-wing government presides over initial economic collapse in 2008-09 in aftermath of global financial crisis
  2. Right-wing government defeats leftists in election, only to preside over more painful economic effects of eurozone crisis, continued European recession and painful budget cuts and tax increases.
  3. Left-wing government returns back to power in second election despite unenthusiastic electorate that has begun looking for more radical alternatives.

That pattern doesn’t exactly fit what happened in Bulgaria’s election over the weekend, but it comes fairly close:

bulgaria resultsSo after blazing into office after the July 2009 elections with a landslide victory, prime minister Boyko Borissov and his center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България) clawed their way to a narrow plurality of the vote over former Sergei Stanishev and the center-left Bulgarian Socialist Party (BSP, Българска социалистическа партия), which governed from 2005 to 2009.

Bulgaria’s electorate turned out in lower numbers than at any time since Bulgaria emerged from the Iron Curtain in 1989.

Maybe that’s fitting, because Bulgaria’s electorate is also smaller than at any time since the 1980s — its 7.5 million population has dropped by about 1.5 million people in the past quarter century.  Bulgaria’s actually in decent fiscal shape for the time being — its public debt is low (only about 18% of GDP) and its budget deficit is below 2% of GDP.  But in just about every other way, Bulgaria is in deep trouble.

As a perennial contender with Romania as the poorest nation in the European Union, Bulgaria’s shrinking population, rising unemployment, flatline GDP growth (the economy just barely grew in 2012) and rising energy costs have left Bulgarians suffering some of the worst effects of Europe’s ongoing recession.  A wiretapping and eavesdropping scandal had already plagued Borissov’s government throughout the campaign before the discovery of 350,000 fake ballots in the lead-up to the election that have also left Bulgarians with little confidence in either major party to address what amounts to an existential challenge for Bulgaria.

GERB won 30.53% of the vote to just 26.65% for the Bulgarian Socialists, which translates into 12 greater seats for GERB than the Bulgarian Socialists (98 to 86), but it’s a far cry from the 22% gap between the two parties that had left GERB with a nearly three-to-one advantage (117 to 40) in Bulgaria’s 240-seat, unicameral National Assembly (Народно събрание).

Although GERB will technically be the largest bloc in the National Assembly, Stanishev (pictured above) seems likely to return as prime minister in a coalition with the third-largest party, the Movement for Rights and Freedoms (DPS: Движение за права и свободи), an economically liberal party that represents ethnic Turks and other Muslims and that has indicated it would support the Bulgarian Socialists.  Together, however, the two parties would have just 119 seats, two short of a majority.

That’s because GERB is unlikely to be able to govern on its own, and it’s loathe to form a coalition with Attack (Политическа партия Атака) is a far-right, anti-European nationalist party.  Despite the horrid economic conditions in Bulgaria, though, support for Attack actually dropped since 2009 from about 9.4% to 7.3%, though it gained two seats for a total of 23 after Sunday’s election.  Together, GERB and Attack would only command a bare one-vote majority, and Borissov would likely prefer new elections than to govern in a weak coalition with a noxious far-right partner like Attack.

GERB and the Bulgarian Socialists have ruled out a ‘grand coalition’ between the two of them, and the DPS has ruled out any kind of coalition with Attack, which makes sense given Attack’s virulent anti-Turk and anti-Roma positions.

But that doesn’t mean that Stanishev can’t find a couple of votes from GERB, perhaps, to push him into office, at least for a short while.  Otherwise, new elections are all but inevitable, though it’s unclear what exactly a new round of elections would mean for Bulgaria’s policy options.

Given that Bulgaria still uses the lev and not the euro, the silver lining is that Bulgaria’s political turmoil won’t spin off yet another cardiac-clenching eurozone crisis moment.  But Europe nonetheless should be quite concerned, especially in light of the erosion of nascent legal and democratic institutions in nearby Hungary and Romania.

British Columbia, Bulgaria, Canada, Pakistan, Philippines

Four world elections in four days: Pakistan, Bulgaria, the Philippines, and British Columbia

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It’s an incredibly busy weekend for world elections, with four key elections on three continents coming in the next four days.

Pakistan

First up, on Saturday, May 11, are national elections in Pakistan, where voters will determine the composition of the 342-member National Assembly, of which 272 seats will be determined by direct election in single-member constituencies on a first-past-the-post basis.Pakistan Flag Icon

With 180 million people and with nearly 60% of them under the age of 30, the elections in Pakistan will by far have the most global impact by implicating South Asia’s economy and not only regional, but global security with U.S. interests keen to mark a stable transition, especially after a particularly violent campaign season marked with attacks by the Pakistani Taliban.

The incumbent government led by the leftist Pakistan People’s Party, the party of the late prime minister Benazir Bhutto and Pakistani president Asif Ali Zardari, is expected to falter.  Their expense is likely to come at the gain of the more conservative Pakistan Muslim League (N), led by former prime minister Nawaz Sharif, who is a slight favorite to once again become Pakistan’s prime minister on the strength of support in Punjab, Pakistan’s most populous province.  But the upstart nationalist, anti-corruption Pakistan Tehreek-e-Insaf (Movement for Justice) is expected to make a strong challenge under the leadership of Imran Khan, the charismatic former cricket star.

Read all of Suffragio‘s coverage of Pakistan here.

Bulgaria

On Sunday, May 12, it’s Bulgaria’s turn, and voters will decide who controls the unicameral National Assembly .bulgaria flag

When the 2008 global financial crisis hit, the center-left Bulgarian Socialist Party was in office under prime minister Sergei Stanishev.  Voters promptly ejected Stanishev and the Socialists in the 2009 elections in exchange for a new conservative party, Citizens for European Development of Bulgaria (GERB) under the wildly popular Boyko Borissov.  Since 2009, however, Borissov and GERB have become massively unpopular, and rising power costs and general economic malaise have made conditioned markedly worse.  The depressed economy and a wiretapping scandal have left the race essentially a tossup between the Socialists and GERB, though a number of small parties, including an far-right nationalist party and an ethnic Turkish party, are expected to win seats.

Of the 240 seats in the National Assembly, 209 will be determined by proportional representation (with a 4% threshold for entering parliament) and 31 will be determined in single-member districts.  With just 7.5 million people, Bulgaria is on the periphery of the European Union — if the result is close and no party wins a majority, it will cause some concern in Brussels, but because Bulgaria isn’t a member of the eurozone, that outcome wouldn’t necessarily cause any wider financial problems.

Read Suffragio‘s overview of the Bulgarian election here.

The Philippines

The action moves back to Asia on Monday, May 13, when the Philippines votes in midterm elections to determine one-half of the Senate’s 24 seats and all of the 222 seats in the Philippine House of Representatives.philippines

Although, with 94 million people, the Philippines has a population of just about half that of Pakistan, it’s a strategic country with an increasingly important economic, cultural and military alliance with the United States as U.S. policymakers ‘pivot’ to Asia.  It doesn’t hurt that the country’s economic growth rate in 2012 of 6.6% was the fastest in all of Asia, excepting the People’s Republic of China.

All of which means that the current president, Benigno ‘PNoy’ Aquino III, whose father was the opposition leader assassinated in 1983 and whose mother, Corazon Aquino, became Philippine president in 1986 after 21 years of rule by Ferdinand Marcos, is an incredibly popular head of state.  His electoral coalition, ‘Team PNoy,’ dominated by his own Liberal Party, is widely expected to make big gains, giving Aquino a little more help facing an unfriendly legislature.

Read all of Suffragio‘s coverage of The Philippines here.

British Columbia

Finally, on the other side of the Pacific Ocean, voters in Canada’s third-most populous province, British Columbia, will vote for all 85 members of its legislative assembly on Tuesday, May 14.BC flagCanada Flag Icon

The British Columbia Liberal Party is seeking its fourth consecutive mandate since Gordon Campbell won elections in 2001, 2005 and 2009.  After stepping down in 2011, his successor Christy Clark finds herself waging an uphill battle to win over the hearts of an electorate jaded by scandal after scandal.  The frontrunner to become the next premier is Adrian Dix, the leader of the British Columbia New Democratic Party, though his opposition to the Northern Gateway pipeline and a feisty campaign by the Liberals have whittled a 20-point lead two months ago to just single digits.

Though British Columbia is home to just 4.4 million people, the result will have important implications for Canada’s energy industry as well as potential implications for the NDP’s national future — a high-profile loss for Dix will only spell further trouble for the national party.

Read Suffragio‘s overview of the British Columbia election here.

Bulgaria

Bulgarian electorate unenthusiastic about both major parties as elections loom

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borissov

The inestimable Edward Hugh wrote over the weekend that Bulgaria’s major political crisis is really the fact of its depopulation — he identifies the loss of 1.5 million Bulgarians as the primary policy problem facing Bulgaria (and much of Eastern Europe and the economic periphery of Europe) in the coming years, cautioning that we should be pessimistic about rosy GDP growth estimates for Bulgaria of 3% or 4% after 2014:bulgaria flag

It is hard to see how you can get serious retail sales growth in a population that is shrinking so rapidly. The end result is that the economy grew steadily into the global crisis, and subsequently has stagnated. This stagnation isn’t simply conjunctural anymore, it has become structural, as the decline in domestic demand associated with ongoing deleveraging and population ageing and shrinkage precisely offsets the positive impact of all that export growth.

So as we think about the recent resignation of Bulgaria’s government in advance of what were supposed to be summer elections (now more likely to be spring elections — Borissov has been unable to convince opposition parties to support a short-term interim coalition government), it’s important to keep that aspect in mind, especially in light of an electorate that seems incredibly disengaged by either the left or the right in Bulgaria.  His government now returned his mandate to form a new government, and the center-left opposition is expected to follow suit, precipitating what is very likely to be springtime parliamentary elections in Bulgaria, a country of 7.5 million people bordering Turkey, Greece and the Black Sea on Europe’s peripheral southeast.

Boyko Borissov (Бойко Борисов) came to office nearly four years ago following a rout by his center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България), a relatively new iteration of Bulgaria’s major conservative party that won nearly 40% of the vote and took 117 seats in Bulgaria’s 240-seat, unicameral National Assembly (Народно събрание).  Borissov (pictured above) and GERB defeated the center-left Bulgarian Socialist Party (BSP, Българска социалистическа партия), led both then and now by Sergei Stanishev, Borissov’s predecessor as prime minister from 2005 to 2009.

Borissov, a former mayor of Bulgaria’s capital Sofia, was once seen as an earthy and decisive leader that Bulgarians turned to in hopes he would reduce corruption and jumpstart the economy.  Stanishev, for his part, was once praised for his role in bringing Bulgaria into the European Union in 2007.  But like many countries in Europe following the 2008-09 global financial crisis and subsequent eurozone crisis, the country has now suffered through both a center-right and center-left government, each of which has been relatively powerless to reinvigorate growth.  The result is that Bulgarians are disillusioned with both Borissov and Stanishev.

Bulgaria’s unemployment rate stands at 12.4%, and its GDP growth has been tepid for the past five years — 1.7% in 2011, an estimated 0.5% in 2012, and is estimated to grow just 1.4% in 2013.

Unlike in many countries, Bulgaria doesn’t have huge public debt issues — its budget deficit was just 1% of GDP in 2012 — as Hugh notes:

Having said that, the country’s government debt at under 14% of GDP is incredibly low, so there is room for flexibility, if it wasn’t populist flexibility. The real issue is that simply spending more this year, or next, won’t fix the underlying problem, and that problem is unlikely to be addressed until it is recognized as a problem by the institutions responsible for economic policy formulation.

That means, in the short-term, Bulgaria seems insulated from the need to institute incredibly deep austerity measures that could crimp domestic aggregate demand, thereby exacerbating Bulgarian growth, though Borissov’s government has implemented all-too-familiar wage and pension freezes as well as tax increases.

More immediately, the cause of the latest government crisis has been protests over higher fuel costs, prompting popular calls for the nationalization of the electricity industry in Bulgaria, and prompting Borissov to pick nationalist, populist fights with the Czech Republic (tiny Bulgaria can hardly pick a fight with Russia, for example, from which it imports 90% of its natural gas).  With a GDP per capita of around $14,000, it routinely competes with its northern neighbor Romania as the poorest member of the European Union.

Borissov has advocated imposing penalty fees upon ČEZ Group, the Czech company that’s also the largest utility in Central and Eastern Europe, which has already sparked a diplomatic tussle between Prague and Sofia, and which could sound alarm bells for potential investors in Bulgaria:

If pushed through, the fines for ČEZ and two other foreign-owned firms will not encourage other investors in Bulgaria, who already have to navigate complicated bureaucracy and widespread corruption and organised crime to take advantage of Bulgaria’s 10-percent flat tax rate.

Albania, which remains outside of the European Union, last month revoked ČEZ’s permits to distribute energy, and a fair share of Bulgarians would like to follow Albania’s lead.

In a Mediana poll released on February 15, both GERB and the Bulgarian Socialists seem to have slumped: the Bulgarian Socialists lead with an anemic 22.5%, and GERB would win 19.3%, with a significant number of voters undecided.  Both Borissov and Stanishev have approval ratings of just 29%, underlining just how unpopular both options are to rank-and-file Bulgarians.

Hugh’s solution is supranational. Continue reading Bulgarian electorate unenthusiastic about both major parties as elections loom →