March 12 (Bloomberg) -- Bulgarian President Rosen Plevneliev is set to announce an interim Cabinet appointed to organize May 12 elections after protests against poverty brought down the government of Prime Minister Boyko Borissov.
The new Cabinet to be selected today will have three deputy prime ministers in charge of economy, social welfare and European Union funding, Plevneliev said on March 5. Marin Raikov, Bulgaria’s current ambassador in Paris and former deputy foreign minister, may become the premier, Pressa newspaper reported, citing unidentified people close to the process. Once the Cabinet is appointed, Plevneliev will dissolve Parliament.
Bulgaria is mired in turbulence after anti-austerity protests that have sunk prime ministers across Europe forced out Borissov, a former bodyguard elected on an anti-corruption platform in 2009. His government focused on budget cuts to ward off bailouts and turbulent bond markets, boosting unemployment to the highest in eight years.
Bulgaria is in its fifth week of protests against poverty, demanding nationalization and a change in the political system. Some protesters set up tents outside the Parliament building in central Sofia demanding amendments to the election law.
The energy regulator cut power prices on March 5 by an average of 7 percent after high electricity and heating bills sparked the first protests on Feb. 9. Pensions will be raised starting April 1 as was planned in this year’s budget, Plevneliev said.
Excessive austerity brought down Bulgaria’s Cabinet, Nouriel Roubini, the New York University professor who predicted the 2008 global financial crisis, said in a Feb. 26 interview.
Borissov’s government was forced to freeze wages and delay value-added-tax reimbursements to businesses to narrow a widening budget deficit and stave off the impact of the euro-area debt crisis.
The fall of the Cabinet will fuel spending before elections and have “negative implications for fiscal consolidation,” Moody’s Investors Service said on Feb. 25.
The lack of a fully functioning government “creates uncertainty about policy direction,”damages “investor and consumer confidence” and undermines “the 2013 outlook for an already weak economy,” Moody’s said.
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