Foreign Correspondence

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Bulgarian ex-bodyguard eyes government after vote
Mon Jul 6, 2009 5:10am EDT


Bulgarian GERB party leader and Sofia's mayor Boiko Borisov
speaks during a news conference in Sofia July 5, 2009.

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http://www.reuters.com/article/worldNews/idUSTRE5651HB20090706

FACTBOX: What will follow Bulgaria's election
http://www.reuters.com/article/worldNews/idUSTRE5651HI20090706

By Tsvetelia Ilieva

SOFIA (Reuters) - Bulgaria's center-right opposition GERB party said it would start coalition talks on Monday, after winning
a national election that boosted the prospect of reforms in the European Union member to combat corruption and recession.

GERB won on a promise to uproot the deep-seated crime that prompted the EU last year to cut aid,
capitalizing on voter anger over the Socialist-led government's failure to stem graft and prevent economic pain.

Party leader Boiko Borisov, 50, a burly Sofia mayor nicknamed Batman after the fictional superhero due to his zeal
for action, said he would head the next government and reiterated his campaign promises to move fast on reforms.

"Those who have stolen should be very afraid ... The thieves will go to jail," Borisov, a former bodyguard, told reporters.

A new government must quickly tackle the judiciary and economic policy to avoid new EU sanctions on aid,
badly needed to fund Bulgaria's cash-strapped economy, and to attract investors, many of whom fled this year.

This is likely to include starting loan talks with the International Monetary Fund and slashing government spending.

Borisov was quick to reassure investors that "updating the budget was the first thing" his government would do, addressing
concerns that Bulgaria might endanger its currency board regime by turning to a public deficit after years of surpluses.

Nearly complete results showed Borisov's GERB -- Citizens for European Development of
Bulgaria -- won 39.7 percent of the proportional vote compared with 17.7 percent for the Socialists.

GERB also won 26 additional seats in the 240-member legislature in a vote for a total of 31 mandates distributed separately,
the results showed. Exit polls showed GERB might get a total of about 120 seats, one seat short of clear majority.

The ex-communist nation of 7.6 million, which joined the European Union in 2007 and is the bloc's poorest
member, last year lost access to over half a billion euros ($700 million) in EU funds as punishment for graft.

CHRONIC PROBLEMS

GERB's better-than-expected election result, which topped opinion surveys by 10 percentage
points, alleviates concerns that protracted coalition talks could water down reform plans.

"A swift formation of a new government would undoubtedly be well received by investors," Danske Bank said in a research note.

Observers said GERB was likely to strike a deal with a grouping of
rightist parties, the Blue Coalition, which is poised to win about 16 seats.

Some said Borisov lacks a track record of government work and his programme needs
concrete policy plans, but they say he appears to have the political will for change. Continued...

"The results showed a complete collapse of the ruling parties," said Rumiana Kolarova from Sofia University.

After 12 years of growth, Bulgaria is in recession and rising unemployment
is ending years of voracious private spending that has fueled debt.

The economy is seen shrinking by two percent in 2009 and foreign direct
investment vital for the economy is expected to halve this year.

Months of pre-election spending by the Socialists also threaten to create a budget deficit that
could deplete the country's hard currency reserves and undermine the lev's peg to the euro.

(Reporting by Sofia bureau, Writing by Justyna Pawlak; editing by Jason Neely)

http://www.reuters.com/article/worldNews/idUSTRE5651H920090706?pageNumber=1&virtualBrandChannel=0