Bulgaria’s Gerb Wins Parliamentary Vote, Exit Polls Show

Bulgarian former Prime Minister Boyko Borissov’s Gerb party won early parliamentary elections, falling short of an outright majority, which will make it difficult to form a government.

Gerb, ousted from power by anti-austerity protests in 2013, won 33.2 percent of the votes, which would give it 90 seats in the 240-member parliament, according to an Alpha Research exit poll released on national television today. The Socialists trailed with 16.5 percent backing. Eight parties passed the 4 percent threshold needed to enter parliament, Alpha says.

“It will be difficult to form a government with this makeup of parliament,” Borissov told reporters in Sofia after the exit polls. “I’m prepared to do my best to avoid the worst scenario under which we have no government.”

The nation of 7.5 million people is struggling to boost growth and curb corruption as four cabinet changes perpetuate political turmoil and the European Commission keeps up pressure for institutional reforms. The snap vote was called after the Socialists lost power following the seizure of Corporate Commercial Bank AD, the nation’s fourth-largest lender, in June.

Fragmented Parliament

Gerb won 33.9 percent of the votes, or 83 to 91 seats in the assembly, tracked by the Socialists with 16.1 percent, or 38 to 44 seats, according to an exit poll by the local unit of BBSS Gallup International. Turnout was 47 percent at 7:00 p.m. in Sofia, the Central Electoral Commission said on its website.

“Next parliament will be very fragmented with seven or eight parties there, depending on the final results,” Jivko Georgiev, an analyst at Gallup, said in a television interview. “It will be difficult to form a majority cabinet.”

The coalition cabinet led by the Socialists resigned in July after a year in power over the loss of parliamentary support and a run on Corporate Commercial, known as Corpbank. The central bank placed the lender under supervision, freezing its assets and making funds unavailable to depositors.

The collapse, brought on by a political feud, raised the specter of a 1997 banking crisis that wiped out the savings for millions of Bulgarians, who accused the authorities of rampant corruption and cronyism.

Coalition Options

Borissov vowed to save Corpbank and punish those responsible for its failure, including the central bank governor, he said in a Sept. 26 interview. Today Borissov, a former bodyguard of Bulgaria’s last communist dictator Todor Zhivkov and of former king and ex-Prime Minister Simeon Saxe-Coburg-Gotha, also pledged to boost growth, curb the budget gap and deal with debt of state-owned energy utilities.

The Reformers’ Bloc, which got 8.7 percent of votes or 23 lawmakers in parliament, could be a coalition partner, even as the Reformers don’t want Borissov as a prime minister, he said.

“We first must agree on national priorities to be supported by the parliament before deciding on who we will negotiate a coalition government with,” Meglena Kouneva, leader of the Citizens for Bulgaria party, part of the Reformers’ Bloc, said in an interview with national television.

Gerb won’t build a coalition with the Socialists or the Movement for Rights and Freedoms, which represents ethnic Turks, Borissov said. The Movement won 14% or 38 seats, according to the Alpha Research.

Budget Revision

The yield on sovereign euro-denominated bonds maturing in September 2024 rose 2 basis points, or 0.02 percentage point, to a six-week high of 2.95 percent on Oct. 3. The cost of insuring the country’s debt against non-payment for five years using credit-default swaps were unchanged at 134, according to data compiled by Bloomberg.

The European Bank for Reconstruction and Development last month cut its 2014 forecast for Bulgaria’s economic growth to 1.5 percent from 1.9 percent. A budget revision plan envisages widening this year’s deficit to 4 percent of gross domestic product from 1.8 percent, above the EU limit of 3 percent.

The interim cabinet’s budget revision, to be submitted to the next parliament for approval, would allow the government to raise 4.5 billion lev ($2.9 billion) of debt, bringing the debt level to 28.4 percent of output from 23 percent in August.

The revision is needed to repay Corpbank’s depositors and also covers cost of flood recovery and gaps in the energy industry as well as the health-care and pension systems, interim Finance Minister Roumen Porozhanov said.

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