GOVERNMENT FACES HOT AUTUMN AFTER DEFEATING

C O N F I D E N T I A L SECTION 01 OF 02 SOFIA 000532

SIPDIS

E.O. 12958: DECL: 07/31/2018
TAGS: PGOV PCOR ECON BU
SUBJECT: GOVERNMENT FACES HOT AUTUMN AFTER DEFEATING
NO-CONFIDENCE VOTE

REF: A. (A) SOFIA 499

B. (B) SOFIA 485

Classified By: charge alexander karagiannis for reasons 1.4 (b) and (d)
.


1. (SBU) SUMMARY: PM Stanishev's government on July 30
easily defeated (150/84) the no-confidence vote called over
the critical July 23 EU monitoring report and loss of EU
funds. Though the motion failed to shake ruling coalition
unity or trigger cabinet changes, the government remains
pressed by growing criticism at home and abroad and
tensions within the coalition. Opposition leaders,
energized by the EU report, are discussing coordinated
efforts for when parliament returns and the budget season
begins in September. Despite the coalition's majority in
parliament, they hope social protests, strikes, walkouts
and demonstrations will put enough strain on the government
and coalition unity to force early elections. The PM's
challenge is to keep the coalition together while
demonstrating to the public his government can effectively
address the EU's concerns. END SUMMARY

THE VOTE
--------------


2. (U) The center-right opposition brought the
no-confidence motion following the July 23 release of the
European Commission monitoring report, which blasted
Bulgaria on the rule of law and mismanagement of EU
funds (Refs A and B). The motion cited "incurred moral
and material damages to the country and its citizens
because of the inappropriate absorption of the EU funds."
All four small center-right opposition groups and extreme
nationalist party Ataka backed the motion. In the
seven-hour parliamentary debate preceding the vote,
center-right MPs blasted the cabinet for inflicting huge
losses on the Bulgarian economy, undermining investor
confidence, and shaming Bulgaria before the world. Ruling
coalition MPs struck back by saying the center-right had
little credibility to talk about corruption, given the
track record of the 1997-2001 center-right government, and
accused Ataka and Mayor Borissov,s GERB of instigating
social tension.

GOVERNMENT RESPONSE
--------------


3. (SBU) At its council meeting July 26-27, the ruling
coalition mapped out measures to address Brussels'
criticism. The three parties agreed to strengthen the
controlling powers of the newly-appointed Deputy Prime
Minister for EU affairs, Meglena Plugchieva, and further
centralize management of EU funds by creating a new
government agency to deal with EU money. In a move to
regain public support, the coalition also approved an
increase of the monthly minimum wage and a new pension
raise in October.


4. (U) In a speech to Parliament following the vote, PM
Stanishev vowed to step up reforms and boost control. He
also said he expected "certain political and economic
circles" to instigate social unrest in the fall, which
combined with a new no-confidence vote would aim to bring
down the government. The PM pointed the finger at GERB and
Ataka, accusing them of inspiring street protests, and
urged the center-right parties not to take part in such
scenarios. Bulgaria needed stability to unlock suspended
EU funding, he said, and early elections would destabilize
the country and lead to further losses of EU assistance.

GATHERING CLOUDS
--------------


5. (SBU) Our contacts predict a politically hot autumn as
the parliamentary opposition and GERB hammer away
at the ruling coalition. Ataka has already walked out of
Parliament, demanding early elections. The center-right
parties, striving to energize and expand their base, are
talking with trade unions about joint protests during the
parliamentary budget debates this fall. GERB, though not
represented in parliament, will add its political strength
to protest actions. Some GERB leaders are concerned that
the party's popularity is peaking and so are pushing for
elections
as soon as possible. It is too early to predict how well
the various opposition groups will cooperate with each
other, especially given the egos involved, but enthusiasm
is running high across the board.


6. (SBU) The PM will also have to manage internal
tensions in the coalition. Ex-king Simeon's National

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Movement for Simeon II (NMSS) is the coalition's weak
link. With popularity ratings under two percent, some NMSS
officials believe breaking away from the unpopular
government and early elections would improve their
prospects at the polls. Stanishev must also parry attacks
from his leftist BSP foes ahead of the party conference in
November. Ongoing public tension between the PM and
President Georgi Parvanov, his former mentor, add to the
growing sense of political instability.

COMMENT
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7. (C) In addition to the escalation of political tension
over the past few months, social unrest, stepped-up
opposition demands for early elections and internal
coalition tension could pose serious challenges for the
government this fall. Many of our contacts expect
Stanishev to play it safe and focus on maintaining
stability within his party and the coalition, and refrain
from any possibly destabilizing moves. A key test this
autumn will be the debates in Parliament on next year's
budget. If the coalition passes this test united, it will
likely get through to the end of its term. But even if
it survives, the government risks becoming inward looking if
the PM focuses only on his internal balancing act and not
on improving government performance to address the issues
raised by the EU.
Karagiannis