SCENESETTER FOR BULGARIA'S JUNE 25 GENERAL ELECTIONS

UNCLAS SOFIA 001020

SIPDIS


SENSITIVE

E.O. 12958: N/A
TAGS: PGOV BU
SUBJECT: SCENESETTER FOR BULGARIA'S JUNE 25 GENERAL ELECTIONS

Ref: (A) SOFIA 808, (B) SOFIA 838, (C) SOFIA 859, (D) SOFIA 931


1. (SBU) SUMMARY: Bulgaria holds general elections on June 25, the
sixth since communism collapsed in 1989. The election will likely
come down to a race between the ruling National Movement for Simeon
II (NMSS) and the Bulgarian Socialist Party (BSP). The NMSS began
the 30-day official campaign on May 25 as an underdog, closing on
the Socialist's lead. However, recent polls show both BSP and NMSS
gaining votes, but the BSP lead remains intact. At this stage,
most analysts believe no one party will receive a clear majority
and a coalition government will lead Bulgaria towards EU membership
in 2007. Numerically, a coalition between the BSP and the ethnic
Turkish Movement for Rights and Freedom (MRF) is a growing
possibility. Also possible are coalitions of the left or right
headed by current PM Simeon Saxe-Coburg Gotha, although Simeon
recently stated his party would not back a BSP-led government.
Post-election jockeying will determine the ultimate "winners" of
this election - possibly several weeks after the vote. END SUMMARY

KEY CONTESTANTS


2. (U) Twenty-two parties and coalitions are running, but reliable
recent polls suggest only six have a realistic chance of entering
parliament.


3. (SBU) THE BULGARIAN SOCIALIST PARTY (BSP): Since its ouster from
power by mass protests over mismanagement of the economy in 1997,
the BSP is slowly reforming as a modern social democratic party
similar to others across Europe. Under the leadership of 39-year-
old Sergei Stanishev the BSP has walked the tightrope between
endorsing Euro-Atlantic values and pleasing its base of elderly
communists. Its reform efforts have been supported by the
performance of President Georgi Purvanov, the former BSP leader who
enjoys broad popularity. The widening gap between the reformist
leadership and the party grass roots, and the lack of experienced
people for top state posts are seen as the serious problems for a
possible BSP government (Ref. A). Unlike other parties, the
Socialists have pledged an immediate withdrawal of Bulgaria's
troops in Iraq should they come to power (Ref B).


4. (SBU) THE NATIONAL MOVEMENT FOR SIMEON II (NMSS): Saxe-Coburg's
movement swept to power in the 2001 elections with 43 percent of
the vote, allowing the former monarch to regain power as prime
minister. The coalition government of the NMSS and the ethnic
Turkish MRF is only the second Bulgarian post-communist cabinet to
complete a full four-year term. It achieved robust economic
growth, lowered unemployment and secured a NATO entry. But the
party has not converted its successes into public support. Since
2001, the NMSS has been hit by infighting and defections which
eroded its parliamentary group to 97 MPs from 120. After a sharp
drop in support over the first three years, support for the NMSS
has increased recently as the country prepares to join the EU in
2007 (Ref C). Simeon's government has a respectable record,
especially in comparison with its predecessors: Zhan Videnov's BSP
government ruined the economy; and Ivan Kostov's center-right
cabinet was associated with high-level corruption. As in 2001,
Simeon's name does not appear on the party list, and he has not
said what he intends to do if his party's results fail to position
him to keep the PM's job (Ref D).


5. (SBU) THE CENTER-RIGHT PARTIES: Center-right leaders have
failed to overcome personal and political differences, and their
parties go to the polls weak and fragmented. The Union of
Democratic Forces (UDF),the center-right group that led post-
communist changes in Bulgaria, has been in opposition since its
bitter defeat in 2001. The UDF government of Ivan Kostov achieved
macroeconomic stability and won an EU invitation, but lost popular
support amid widespread allegations of corruption. The UDF has
been torn by high-profile rows between its leaders that led to the
formation of two new groups. Sofia's popular Mayor Stefan
Sofianski launched in 2001 a party called the Union of Free
Democrats (UFD). Last year Kostov left the UDF to form the
Democrats for Strong Bulgaria (DSB). The UDF, now led by former
Foreign Minister Nadezhda Mihailova, is third in the polls and
likely to enter parliament. However, chances are uncertain for
Kostov's DSB, and Sofianski's UFD. Sofianski's image has been
marred by ongoing court proceedings over allegations of corruption,
while Kostov suffers from high negative ratings.


6. (SBU) THE MOVEMENT FOR RIGHTS AND FREEDOMS (MRF): A party of
Bulgarian ethnic Turks that makes up around 10 percent of the
population, the MRF is the junior partner in the NMSS government.
The MRF and its leader Ahmed Dogan have emerged as powerbrokers as
the ex-king's government depends on its support in parliament to
stay in power. Many believe the ethnic Turkish party, which won
7.5 percent of the vote in 2001 and has 20 seats in parliament, has
gained influence in the government disproportionate to its
representation. Until recently, the MRF has had an almost complete
monopoly on the ethnic Turkish vote. For these elections, however,
two smaller groups are also vying for the Turkish vote and could
erode the MRF's support. The MRF could again play a key role in
creating the next government.

POSSIBLE SCENARIOS


7. (SBU) The elections are being hotly contested, but a landslide
victory by any side is less likely than in previous votes. The gap
between the Socialists and the NMSS had been narrowing somewhat,
but latest polls show support to have flattened and the BSP retains
a significant lead. At this stage the BSP seems to be in the best
position to emerge as the biggest parliamentary faction. Whether
the BSP can garner an absolute majority is less certain. Under
Bulgaria's complex proportional representation system, a low
turnout favors the better-organized Socialists who have the most
solid electorate, compared with NMSS' weak local structures. On
the other hand, the BSP has not appealed to voters outside its base
in the past, while the NMSS may attract centrist and undecided
voters as well as disillusioned rightwing supporters. If the BSP
fails to win an absolute majority they will be forced to seek a
coalition with the ex-king's party or with the ethnic Turkish MRF.
A BSP-MRF coalition, unfortunately, would be highly susceptible to
outside influences and special interests. It would be a
comfortable ideological fit, but the personalities involved might
make it difficult in operation.


8. (SBU) If the NMSS narrows the gap with the BSP it could hold the
key to the formation of the next government as either a partner in
a center-left government, or the leading force in a disparate
center-right coalition. The past four years have shown the moves
of the enigmatic ex-king are difficult to predict. Given Simeon's
style and track record, it is unclear whether his recent statement
that his party would not back a BSP-led government is pre-election
posturing aimed to attract the soft center-right electorate, or a
hard political position. An NMSS coalition with the Socialists
could secure a more stable parliamentary majority but would be a
tough historic compromise for Simeon since the BSP's forebearers
forced the royal family out of Bulgaria 50 years ago. Although a
center-right government led by Simeon is less likely according to
current polls, it is still possible and a more natural ideological
choice for Simeon.

COMMENT


9. Bulgaria has not had a Socialist government since demonstrations
ousted Zhan Videnov's cabinet in 1997. Since then, two consecutive
reformist governments have stabilized the economy and set the
country firmly in the Euro-Atlantic orbit. Most analysts believe
additional reforms are critical, but some doubt the Socialists, who
spent eight years in opposition, are capable of mustering a team
qualified to implement them. Some doubt the BSP's commitment to
sustaining fiscal discipline and attracting foreign investment,
given their lavish social pledges and comments against key
privatizations. Bulgarians have proven to be irrational voters
with short memories of the political past, tending to back the
party that has been longest out of power. The memories of the
1996/97 economic crisis have faded and the BSP is now broadly
associated with its young leader and the popular President. The
aging population, which is active in the polls and forms the BSP
base, also backs the case for a Socialist victory. Unlike previous
elections, the real "winners" may not emerge on election night and
much will depend on post-election coalition talks.


10. TABLE: Alpha Research polling agency nationwide survey.
Party May 29-June 3, 2005 (%)
--------------
BSP 27.5
NMSS 14.6
UDF-DP-St.George's Day 7.4
MRF 5.2
UFD (Sofianski)-BANU-IMRO 3.6
DSB (Kostov) 3.4
Others 7.0
Have not decided 10.0
Will not vote 21.3

In case of a 60-percent voter turnout, the BSP would win 108 MPs,
the NMSS - 56, UDF - 29, MRF - 20, Sofianski's coalition - 14 and
DSB - 13. Majority in the 240-seat parliament requires 121 seats.