Georgi Karasimeonov (Ed.) B A R O M E T E R Bulgaria’s Political Parties Year 14, Issue 3, July - October 2014 The early parliamentary elections held on 5 October resulted in eight parties and coali- tions entering in parliament. 32.6% of the electorate voted for GERB, 15.29% for the coalition “BSP - Left Bulgaria,” 14.91% of voters supported DPS, 8.91% the Reformists’ Block, and 7.29% the Patriotic Front. The National Assembly will also include Bulgaria Uncensored, which won 5.65% of the electoral vote, Ataka - with 4.54% and ABC - with 4.18%. These results mean a severe fragmentation of Parliament and will make negotia- tions on forming the next government very difficult. GERB won the elections with a convincing lead over BSP, but the result is far below expectations in terms of the number of MPs. Te party will have below 90 MPs, which makes it impossible to form a center-right coalition with the participation of the Re- formists’ Block alone. Thus, GERB will have to seek other coalition partners. The par- ty left the door open for all parties, except Ataka and Bulgaria Uncensored. Radan Kanev, from the Reformers, declared that he would not support a GERB cabinet with Borisov as Prime Minister. Perhaps this particular issue will become the cornerstone for forming a government. BSP suffered a severe defeat. The party received about half a million votes - its weakest result in parliamentary elections so far. This raises questions about the need for urgent reforms and changes within the party. ABC’s entry into the National Assembly breaks the recent monopoly of BSP over the political space to the left and shows that the Left is in a new phase of its development. Whether this new path will be one of division and fragmentation or one of unification will depend entirely on the Left’s leaders. Imprint Orders All texts are available online Friedrich-Ebert-Stiftung www.fes.bg 97, Knjaz Boris I St. Commercial use of all media The views expressed in this publication published by the Friedrich- are not necessarily those of the Responsible: Ebert-Stiftung (FES) is Friedrich-Ebert-Stiftung or of the Regine Schubert, Director not permitted without the organization for which the author works. Friedrich-Ebert-Stiftung written consent of the FES. Office Bulgaria Analyses B AROMETE R 3/2014 1 CONTENTS 1. The Political Status Quo ...........................................................................................................................2 2. Current Status and Development of the Party System ...............................................................................6 2.1. Citizens for European Development in Bulgaria (GERB) ..........................................................................6 2.2. Bulgarian Socialist Party (BSP) ................................................................................................................7 2.3. Movement for Rights and Freedom (DPS) ..............................................................................................9 2.4. Bulgaria Uncensored ...........................................................................................................................10 2.5. The Reformists’ Block ..........................................................................................................................11 2.6. Ataka ..................................................................................................................................................13 3. Public Opinion….. ..................................................................................................................................13 4. Main Conclusions and Forecasts….. .......................................................................................................14 2 B AROMETE R 3/2014 1. The Political Status Quo remains closed, as BNB has extended the deadline for opening it twice already. BNB’s Over the past three months the political latest decision envisages that the bank will status quo has been largely determined by remain under conservatorship until 20 No- two main themes - the election campaign vember. The National Bank’s management and the crisis around the Corporate Com- became the object of serious criticism, due mercial Bank (CCB). The country’s banking to the CCB crisis. Many financial experts system faced a serious challenge when, at blamed the central bank’s Governor Ivan the end of June, shortly after the CCB was Iskrov and its entire board for what hap- placed into conservatorship, the third-larg- pened to CCB and for the lack of supervi- est bank in Bulgaria - First Investment Bank sion. Just two weeks before the CCB was (FIB) fell into a temporary liquidity crisis. closed, BNB allowed its majority owner, This happened after the bank‘s depositors Tsvetan Vasilev to acquire Credit Agricole started a run on the bank, giving in to pan- Bank - now Commercial Bank Victoria. It ic caused by rumors that it had problems, was announced that the buyer had excel- which spread through the media and social lent financial indicators. Once CCB and networks. The bank announced that it had Commercial Bank Victoria were placed un- fallen victim to an unprecedented criminal der conservatorship, Ivan Iskrov suggested attack, that BGN 800 million had been with- that CCB’s good assets be transferred to drawn within a single day and consequently Commercial Bank Victoria, which could be requested support from the Bulgarian Na- rehabilitated, while all bad loans remained tional Bank (BNB). FIB’s situation led to ur- in CCB, which would then be made bank- gent political talks at the President’s Office rupt. This decision, however, did not receive with the participation of all major political the support of the main political parties. parties in the country and BNB Governor Moreover, many experts and politicians Ivan Iskrov in search of solutions to tackle saw in this proposal an attempt by certain the crisis. Participants in the talks issued economic circles to acquire the bank’s as- a joint statement in which they declared sets at a low price. Ivan Iskrov and the Man- that the banking system was stable and agement Board of the BNB were further that the State would do all that was nec- accused of not providing liquidity support essary to support the bank, which was fac- to CCB, as they had done for FIB, and not ing temporary difficulties. What happened allowing its shareholders to rehabilitate the to FIB was described as a criminal attack, bank, as required by law. Many of the main punishable to the fullest extent of the law. political parties demanded Iskrov’s resigna- The declaration calmed citizens and queues tion and it is likely to become fact once a at the bank’s branches were gone the next new Parliament is formed, following the day. FIB received help from the State, with October elections. the approval of the European Commission, For four months now there is still no fi- whereby the amount must be repaid within nal report on the true state of the CCB. The a year and a half after the preparation of a conservators’ interim report, published in restructuring plan. late July, shows that the bank had a good Four months later, the problem with capital adequacy ratio as of 30 June this CCB continues to be unresolved. The bank year, and its assets exceeded the liabilities. B AROMETE R 3/2014 3 This prompted different interpretations by GERB and DPS for advocating a „bank hol- different economic analysts and politicians iday“ during the talks at the President’s - on one hand, that the bank was being Office, following the crisis around First In- drained and that it resembled a pyramid, vestment Bank, which had envisaged a lim- and on the other hand, that it was being itation of banking transactions for a certain attacked due to economic interests related period of time. to Delyan Peevski. In late September, the European Com- The Prosecutor’s Office filed charges mission opened an infringement procedure against the main cashier and the executive against Bulgaria for failing to transpose a director of the CCB for draining BGN 206 European Directive, pursuant to which de- million. Prosecutors also sought the arrest positors with deposits of up to EUR 100,000 of the majority owner Tsvetan Vasilev, for are entitled to receive their funds within 20 whom Interpol announced an internation- days, provided that the bank is placed un- al search. The location of CCB’s owner was der special supervision. According to the unclear for nearly two months. In mid-Sep- current Bulgarian Law on Bank Deposit tember, he surrendered to Serbian author- Guarantee, guaranteed deposits are pay- ities and is now subject to an extradition able within two months and only provided procedure. that the respective bank’s license has been Although his whereabouts were un- revoked. Currently, the CCB is placed un- clear, Tsvetan Vasilev sent several letters to der conservatorship, but its license has not the media, in which he accused a number been revoked, which is why people cannot of state institutions – BNB’s Governor, the receive their deposits guaranteed by law. Prosecution and Oresharski’s government – On 5 August, President Rossen Plevne- of serving the interests of individuals who liev issued a decree appointing an interim were trying to acquire the bank’s assets. government that would operate until the Accusations that, through their initial next National Assembly formed a new actions against Tsvetan Vasilev’s companies, cabinet. George Bliznashki, a professor prosecutors had contributed to