Feb. 19 (Bloomberg) -- Bulgarian police clashed with protesters angered about rising unemployment and energy prices as the prime minister pledged to pull the power distribution rights of Czech utility CEZ AS after firing the finance chief.
Premier Boyko Borissov, who faces elections July 7 in the European Union’s poorest member, refused to quit today after 11 people, including five officers, were hurt yesterday. Protesters pelted Parliament with stones, smashed shop windows and battered cars, Police Commissioner Valeri Yordanov said today, as thousands marched in Sofia and other cities.
“I see no reason to resign now,” Borissov told reporters. “I want to complete the infrastructure projects started by my government. If we resign now, the consequences will be catastrophic.
Borissov, who was swept to power in 2009 amid protests against austerity by the previous government, is under pressure to keep the Balkan nation’s economy growing and avoid international financial aid. The new round of demonstrations, which already cost Finance Minister Simeon Djankov his job, may force the premier to ease up on further budget cuts to stay in power after elections.
‘‘The currently strict budget deficit targets may also fall victim to more-populist economic policies,’’ said Kata Baller, an analyst at DZ Bank AG. ‘‘The pressure on the government has, of course, negatively affected the performance of Bulgarian assets in the past days.’’
The yield on Bulgaria’s euro-denominated bonds due in 2017 fell three basis points, or 0.03 percentage point, to 2.095 percent by 3:35 p.m. in Sofia. The yield rose 18 basis points yesterday, the biggest increase since the note was sold in July.
Djankov won EU and International Monetary Fund plaudits for his tight spending controls as Bulgaria navigated the global economic crisis without borrowing abroad.
Aside from dismissing Djankov, Borissov wants to revoke the license of Prague-based CEZ, the biggest power utility by market capitalization in central and eastern Europe, following an investigation into the local units of the Czech utility.
The State Energy Water Commission can decide that there are grounds to start a procedure to revoke the license, which then can be appealed in court, Ralitsa Stoyanova, the energy regulator spokeswoman, said by phone today. The regulator hasn’t announced its decision so far.
‘‘The license revocation is a very long legal process,” Stoyanova said. “If the procedure is started, then a major manager will be appointed in the company, who will be tasked to find another to which to give the license.”
CEZ said the government steps were politically motivated and denied any wrongdoing that could trigger removal of its license in Bulgaria.
“CEZ rejects the politicizing of the entire matter in light of the approaching parliamentary elections,” it said in an statement from Prague today.
Czech Prime Minister Petr Necas said today in an e-mailed statement he will demand the Bulgarian government explain the “unprecedented step.”
“I regard the statements by Bulgarian officials about CEZ and other foreign companies as very non-standard and see the whole issue as highly politicized because of the approaching parliamentary elections,” Necas said. “I expect Bulgaria, as a member of the European Union, to stick to its international obligations, European law and its own laws on protection of foreign investments.”
Borissov yesterday said he would widen the authority of Tomislav Donchev, the minister in charge of EU funds management, to include the Finance Ministry after Djankov’s departure. The changes have yet to be voted in Parliament, which will test support for the Cabinet.
“No government can resolve in three or four years serious structural problems which were accumulated over the past two decades,” Menda Stoyanova, a ruling-party lawmaker and the head of Parliament’s budget and finance committee, said on TV7 in Sofia today. “The government didn’t achieve its pledge to restore justice.’
Protesters yesterday chanted ‘‘Djankov went, time for Borissov to go.”
In a response to public demand, the government will propose to the energy regulator to cut power prices by 8 percent from March 1, Borissov said.
The Bulgarian premier had a phone conversation with Russian President Vladimir Putin in which Borissov was invited to visit Moscow to discuss joint projects and ways to resolve lawsuits between Rosatom Corp. and the National Electricity Co. over the canceled project to build a nuclear power plant at Belene, 220 kilometers (137 miles) northeast of Sofia on the Romanian border, Borissov said.
Borissov, a former bodyguard, came to power on pledges to root out corruption and improve living standards. The government delayed efforts to overhaul the pension and health-care systems and the energy industry amid smaller protests throughout his term in office.
The EU’s poorest state in terms of per-capita output ranked as the 27-nation bloc’s most corrupt country after Greece in 2012, according to Berlin-based research organization Transparency International.
Bulgaria’s economy expanded 0.5 percent from a year earlier in the three months through December, the 10th quarter of growth.
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