BULGARIA: COALITION MANEUVERS

C O N F I D E N T I A L SOFIA 000381

SIPDIS

PASS TO EUR/NCE

E.O. 12958: DECL: 07/09/2019
TAGS: PGOV BU
SUBJECT: BULGARIA: COALITION MANEUVERS

Classified By: Ambassador Nancy McEldowney for reasons 1.4 (b) and (d).


1. (C) Summary: Eight days after the July 5 elections, the
shape of Bulgaria's next government remains unclear. The
Blue coalition of UDF and DSB (pro-West center-right parties)
barely squeaked into parliament after winning 6.7 percent of
the vote, though most assumed they would play a king-maker
role by joining forces with front runner GERB, Sofia Mayor
Borissov's center-right party. In a surprise move, Borissov
is now contemplating a minority government that would rely on
pledged support from a variety of parties, including
extremist Ataka. He is also considering a effort to split
the Blue coalition, to jettison DSB Chairman and former PM
Ivan Kostov, and may offer UDF the Foreign Ministry as
incentive to ditch its campaign partner. With the new
parliament being convened on July 14, the pressure is on to
finalize negotiations and Borissov hopes to install a new
government before the end of July. End Summary.


2. (C) In a series of post-election meetings with Blue
Coalition co-chairs Martin Dimitrov (UDF) and Ivan Kostov
(DSB),Ambassador discussed on-going coalition negotiations
and reviewed the priority tasks facing the next government.
Dimitrov expressed strong support for GERB, as the major
victor with almost 42 percent of the vote, and said that the
Blue Coalition would be willing to join a government without
demanding any ministerial portfolios. Kostov took a
different stance, first insisting the Blues had "earned"
representation in the cabinet via several ministerial slots,
and then said he expected to place experts within each
ministry. Both acknowledged that GERB held the upper hand in
the negotiations and that time was running short.


3. (C) Ambassador noted that the new government (whatever
its final composition) would need to deal immediately with
two major challenges: the economy and corruption. She urged
quick action on key issues to demonstrate the new
government's commitment and suggested steps it could take
using executive powers alone. It could start repairing
relations with the EU by instituting world-class oversight
procedures and expediting the stalled court cases dealing
with embezzlement of EU money. Problems with public
procurement tenders could be reduced simply by having a
credible observer (opposition member, academic, technical
expert) involved. A special panel of honest and competent
judges could be an effective tool for organized crime and
high-level corruption cases. The Ambassador urged them to
attack crime and corruption aggressively, but to avoid the
appearance of partisanship. All should be equal under law.


4. (SBU) Both Kostov and Dimitrov were hesitant toward an
IMF standby agreement. They would rather avoid an agreement
and hope to make it through to next year when they expect the
crisis will "soften." At the same time, they said they would
want to keep talking with the IMF and have a draft agreement
ready to submit if necessary. The Ambassador told both that
to minimize the pain of the crisis Bulgaria needed to be
attractive as possible for FDI, and could do so quickly by
resolving existing commercial disputes and developing a
comprehensive package of investment incentives.


5. (SBU) The Ambassador underscored the importance of
promoting transparency in energy transport and noted that the
Extractive Industries Transparency Initiative (EITI) was
prepared to develop a program for Bulgaria. Though designed
for extractive industries, the EITI model can easily be
applied to energy transport. Both Kostov and Dimitrov
expressed interest. Kostov spoke out against the troubled
Belene nuclear power plant project. Ambassador advised him
to look at the hard economic and technical facts, bring in
international design and safety inspectors from the IAEA or
another reputable group, and then make a judgment on those
facts.


6. (SBU) Noting the potential to further deepen our defense
partnership, the Ambassador suggested Bulgaria consider
greater NATO use of its joint training facilities, such as
training NATO soldiers to participate in Operational Military
Liaison Teams (OMLT) in Afghanistan. This could be an
important supplement to Bulgaria's troop contributions for
the NATO operations in Afghanistan.


7. (C) Kostov confirmed that Ankara had supported the
ethnic-Turkish Movement for Rights and Freedoms (MRF),widely
viewed as Bulgaria's most corrupt party. The alleged support
included cash for the campaign and relaxing border crossing
procedures to facilitate Bulgarian Turks resident in Turkey
crossing into Bulgaria to vote. He said good relations
between Bulgaria and Turkey were essential and this type of
interference must stop.
McEldowney