BULGARIA: AS SIMEON'S PARTY FAILS TO FORM

UNCLAS SOFIA 001429

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV BU
SUBJECT: BULGARIA: AS SIMEON'S PARTY FAILS TO FORM
GOVERNMENT, PARTIES BRACE FOR LAST-CHANCE TALKS

Ref: (A) SOFIA 1134, (B) SOFIA 1325, (C) SOFIA 1363, (D)

SOFIA 1380, (E) SOFIA 1404


1. (SBU) SUMMARY: PM Simeon Saxe-Coburg's party August 11
abandoned its attempt to form a government after failing to
strike a coalition deal with the Bulgarian Socialist Party
(BSP). The two parties have been at odds over forming a
cabinet since the Socialists won the June general elections
but failed to gain a clear majority. President Georgi
Purvanov now must hand the third and final mandate to form a
government to one of the smaller parties. The Socialists
have indicated that they support a four-way coalition with
the NMSS and two small parties. Insiders from both groups
told us they were optimistic that they will be able to form
a government relatively quickly this time around. Failure
of this third attempt will force new elections in the fall.
END SUMMARY


2. (SBU) President Purvanov now has a week to task one of
the remaining parliamentary groups to nominate a PM and try
to form a government (Ref. A). The mandate is expected to
go to either the ethnic-Turkish Movement for Rights and
Freedoms (MRF) or the small center-right Bulgarian People's
Union (BPU),both of which have indicated they would back a
BSP-led government.


3. (SBU) The Socialists are working to forge a four-party
coalition with their MRF allies, the NMSS, and the BPU.
Socialist leader Sergei Stanishev, who remains the BSP's PM
nominee, said Bulgaria may have a new government as early as
next week. Insiders from both the BSP and the NMSS also
appeared optimistic, saying that since the two largest
parties have each blocked the other's attempt to form a
government, the third mandate will be characterized by
pragmatism rather than posturing. A senior BSP official
told us the leaders of the four parties were scheduled to
meet late on August 12 to discuss a coalition agreement.
Many things can still go wrong, but party leaders told us
they hope to reach agreement over the weekend on a coalition
platform and distribution of ministerial positions. If they
succeed, the vote in parliament could take place as early as
next Wednesday, according to these sources.


4. (SBU) A four-party government would control 182 of
parliament's 240 seats, more than the two-thirds majority
required to pass constitutional amendments needed to meet EU
requirements. If a deal with Simeon's party fails, the
Socialists will try to form a government with the MRF and
the BPU, which would be less stable and enjoy narrow public
support, but would still have a majority of some 129 seats.
If the third attempt to form a government fails, the
President will dissolve parliament, install a caretaker
government, and call new elections for the autumn. President
Purvanov has urged parties to agree to a deal and quickly
form a government (Ref. E).


5. (SBU) COMMENT: Public cynicism is high in the wake of
the outgoing government's dithering response to widespread
flooding (ref E). Many already accuse the politicians of
fiddling while Rome burns, and further delay in forming a
government could well result in postponement of Bulgaria's
EU membership. The outcome of potential new elections is
anybody's guess, but the consensus seems to be that they
would not resolve the current political impasse, and could
worsen the situation by bringing in more members of the
extreme nationalist Ataka party. Fearing that another
election cycle would further erode public faith in the
political class, the major parties appeared determined to
use this last chance to form a government. Although party
leaders are optimistic at this point, the experience of the
past month has shown that deals can fall apart in the
eleventh hour. END COMMENT
LEVINE