Bulgaria: GERB heads for election victory, prospects for new government uncertain
Metodi Tzanov
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Bulgaria will hold another snap general election on Oct 27, the seventh in a row in the 2021-2024 period, but the prospects for the formation of a regular government and solution to the domestic political crisis remain uncertain. Election campaigns and parties' capacity to formulate clear messages have consistently weakened with every new election, resulting in further alienation of the population from the electoral process. A recent Mediana poll showed that 53% of the voters no longer believe that their votes are important for the final election outcome, nor do they trust the democratic process. Increasing mistrust towards the institutions and parties may is already a risk for the entire political system legitimacy and stability even in the longer run, in our view.
The election polls forecast the entry of at least seven parties in the parliament with two more parties standing chances for MP seats after Oct 27. In that sense, the large parliamentary fragmentation from the past few years will persist, posing challenges to the formation of a stable ruling coalition. Yet, we think there will be slightly higher chance for government formation in the new parliament compared to the previous one, as parties are aware that every new snap election undermines further their electoral base. Our baseline scenario is that parties will be more conciliatory this time, in order to prevent further prolongation of the domestic political crisis, new delays in the eurozone accession and in the absorption of EU funds. Animosity between GERB and WCC-DB, the pro-Western partners in the last regular government, gradually eased during the summer, which makes the election of some kind of a pro-Western or a programme cabinet for a limited period of time feasible. All in all, we expect that parties will hold discussions on government formation, in difference to the post-election situation in June. The talks may become protracted in time, but could eventually bring about an agreement on some government formula, in our view. Nevertheless, it is unrealistic to expect the formation of a really stable regular government, capable of serving an entire four-year mandate. Certainly, the scenario of a new political deadlock and new snap election remains equally plausible, in our view. If it materialises, it will pose strong risks to the country's fiscal and foreign policy, and will turn detrimental to the mid-2025 eurozone entry aspirations.
MRF's split into two may bridge resumption of partnership between GERB and WCC-DB
The general election on Jun 9 failed to deliver a regular government, which brought about the scheduling of a new snap election for Oct 27. We recall that the last regular government of right-wing GERB and liberal WCC-DB lasted only nine months, between Jun 2023 and Mar 2024. It was very fragile due to its peculiar non-coalition formula, allocating all the ministries and the PM office to liberal WCC-DB, while right-wing GERB held the foreign affairs ministry. In March, a rotation of PMs was envisaged and GERB's candidate Mariya Gabriel was supposed to replace PM Nikolay Denkov at the position for the next nine months. However, GERB insisted to receive larger representation in the government, besides the PM and the foreign affairs portfolios. The conflict between the two largest parties escalated in the spring of 2024, leading to the toppling down of the cabinet. In that sense, the stalemate after the elections in June was pre-destined, as both parties were determined not to compromise with each other anymore. Keeping distance from GERB was of particular importance for WCC-DB after it lost the support of 300,000 voters in the Jun 9 election. Those voters were disappointed from WCC-DB's perceived spineless conformability to GERB's and MRF's pressure during their joint ruling, according to the general comments and perceptions.
The months after July passed smoothly, regarding the relations between GERB and WCC-DB, while the problems related to the absence of a regular government in an environment of high geopolitical tension have been brought to the forefront again. Therefore, we expect a shift in both GERB's and WCC-DB's approach towards each other after the new election. GERB leader Boyko Borissov already signalled his commitment to forming a government at almost all costs after the elections and we do not doubt that he will reach out to WCC-DB as his preferable pro-Western coalition partner again. WCC-DB leaders have displayed inconsistent attitudes in regards to the possibility of a new partnership with GERB so far, but lastly proposed the appointment of a distinguished person of authority as PM, who should be equally distanced from the parties and propose his own team of ministers. Borissov reacted negatively, urging WCC-DB to name in advance the possible candidates measuring up to the described profile. The leader of GERB continued to advocate for a return to the traditional coalition-making process and the appointment of well-known politicians for PM and ministers. Despite the ongoing frictions on the topic, we still consider them softer compared to the spring and early summer, paving the way for negotiations between GERB and WCC-DB this time. We think that both parties will likely justify potential cabinet talks with the undoubtedly negative consequences for the country from the political instability, challenging Bulgaria's domestic and foreign policy goals. It is another question whether these negotiations could develop constructively and produce an outcome, or whether the two parties will again prefer to irritate each other in their struggle to obtain more power.
The last two months brought about one key event in the domestic political life, which we see as a decisive stimulus that may motivate WCC-DB to resume partnership with GERB. More precisely, ethnic-minority MRF, which has been a very important ally for GERB in the past decade, fell apart into two factions, thus losing its king-maker position and political weight. We recall that MRF, led by Delyan Peevski, a politician sanctioned for corruption by the U.S. Magnitsky Act in 2021, became the second largest party after the Jun 9 election, displaying strong ambitions to navigate the political processes and interfere as a major player in the next government and in the overall decision-making process. As WCC-DB's popularity severely suffered from its evident inability to withstand the pressure of both Peevski and Borissov in its last government, WCC-DB could no longer afford collaboration with the two parties in the aftermath of the June elections. However, Peevski's hunger for power expansion destabilised his positions in MRF itself during the summer, as he clashed with MRF's honourable leader and founder Ahmed Dogan over power distribution issues. Dogan released a statement asking other parliamentary parties to help MRF in getting rid of Peevski and acknowledged his mistake in letting Peevski appropriate state institutions over the past decade. We see Dogan's statement as the official confirmation of the extent of power that Peevski has been able to obtain over the institutions, justice system, political and business life in the past years, but we note that Dogan has been also known for behind-the-scene schemes. Their conflict is likely to have a power redistribution effects in the short- and mid-term, in our view, and we see the first events already happening, as Peevski has started attacking people close to Dogan in the past weeks.
In September, MRF officially split into two parties, MRF-New Beginning, led by Peevski, and the Alliance for Rights and Freedoms (ARF), led by Ahmed Dogan. So far, sociology agencies have been cautious about assessing the percentage of votes that the two new parties will attract on Oct 27, but it is almost certain that neither of them will be sufficiently strong to fight for the second or the third place in the elections. Peevski has mobilised his institutional, financial and organisational capacities to guarantee MRF-New Beginning's entry in the parliament, while ARF will probably rely on Dogan's traditional high popularity among the ethnic Turkish and Roma voters. The upcoming developments and election results of the two wings will be important, as they may lead to some domestic political restructuring, in our view. We think that MRF's biggest ally GERB will have to choose soon whether to partner with Dogan's faction or with Peevski's wing, which would be quite decisive for GERB's future, in our view. WCC-DB already signalled that it may consider partnering with Dogan's ARF and excluded any possibility to deal with MRF-New Beginning of Peevski. Therefore, the feasibility level for a new cabinet between GERB and WCC-DB, will largely depend on GERB's future decision whether to stay an ally of Peevski or to take the side of Dogan, in our view.
In all cases, we think that the MRF's split has brought some relief for GERB and WCC-DB, as both seemed unable to resist Peevski's march for officialising his monocratic power earlier this year. Accordingly, the prospects for a more equal collaboration between GERB and WCC-DB are more favourable at present, in our view, which could unblock their inclinations to negotiate for a government. However, the current opinion polls show that GERB and WCC-DB will need a third partner for a ruling majority, which will complicate the prospects for a regular government.
Party efforts for pre-election campaign close to zero
Political apathy has prevailed among both voters and parties in the past few months. Possibly, the summer holiday season discouraged parties from efforts to build large pre-election campaigns and they limited themselves to occasional statements on media. The recent caretaker finance minister's warning for an accelerating increase in the gap between budget revenues and expenditure that may require tax hikes did not trigger specific responses and ideas from parties, either. Only right-wing GERB leader Boyko Borissov reiterated that taxes should not be hiked, while expenditure needs to be limited, but he did not engage in a more thorough outline of possible solutions to the fiscal issues. Liberal WCC-DB instead confirmed its satisfaction from the increases in pensions and public wages in the past few years, which may further alienate right-wing voters, in our view. The remaining parties did not take a visible stance regarding the budget problems, probably unwilling to touch upon sensitive and unpopular issues before the elections, in our view. Vuzrazhdane, which will compete with WCC-DB for the second place in the elections, only mentioned its idea for a differentiated VAT rate, which we do not see as a measure that would attract support from other parties easily.
Similarly, geopolitical conflicts in the Middle East and Ukraine were no longer in the limelight, highlighting the stagnation in the political space. Exhaustion from repeated elections has seemingly deprived parties from the energy to debate, elaborate and propose ideas in regards to both domestic and external politics, in our view. Parties and their leaders have also lost edge to defend their previous priorities, such as the fight against corruption, justice reforms or even the pro-eurozone or anti-eurozone membership stances. GERB was overall the most active in the public space in the past few weeks, sticking to infrastructure and prevention of illegal migration goals, but even its campaign seemed less vigorous than ever before. Meanwhile, MRF-New Beginning of Peevski focused on the outdated topic of the changes of the names of Bulgarian Turks in the 1980s, while ARF of Ahmed Dogan played the victim of police and prosecution attacks against its members, accusing Peevski for organising them. None of the two former MRF's wings really stood out with other messages.
OPINION POLLS
The number of opinion polls released until the last week before the Oct 27 elections was lower compared to previous elections, but all showed a clear advantage of GERB, of some 10pps ahead of the next two parties - liberal WCC-DB and nationalist Vuzrazhdane. Support for GERB ranged between 23.1% and 25.7%, while Vuzrazhdane and WCC-DB received support between 12% and 16% in the different polls. The electoral potential of MRF-New Beginning and ARF represents the highest uncertainty, as there is no evidence how the former MRF's electorate in Turkey will vote. So far, most of the polls give an advantage to Dogan's ARF and it might be able to obtain around 8% of the voters' support, while MRF-New Beginning may rely on 5% to 7% of the votes. However, we do not rule out a surprise with potentially higher result for MRF-New Beginning, given Peevski's large financial and institutional resources.
BSP, the largest party in th socialist political segment sought to unite with smaller left-wing parties, but support for BSP remained unchanged, between 5% and 9% in the different polls. TV showman Slavi Trifonov's TISP received around 5%-6% in most of the polls. The two parties that also stand chances for entry in parliament are Greatness and Sword, both of them with populist messages, which received slightly above 3% support in the polls, just below the 4% electoral threshold.
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Our calculations under the scenario for seven parties in the parliament indicated that GERB can rely on having 70 to 78 MP seats, while WCC-DB and Vuzrazhdane will probably have between 40 and 45 MPs each. This means that GERB and WCC-DB are unlikely to have sufficient number of MPs for a majority together, so a third party will be necessary to join in the potential talks for a cabinet.
In the case of eight or even nine parties in the parliament, the respective MP seats of each party will decline to a point where a three-party coalition might not be possible, in our view. We still think that the scenario with seven parties in the parliament is the most plausible. However, we note that the post-election results often varied significantly from the preliminary opinion polls in the past few years, so sociological agencies have warned about potential reversals and surprises in the final election results on Oct 27.
POST-ELECTION SCENARIOS
Coalition between GERB and WCC-DB, with support of a third party - 45%
The rapprochement between GERB and WCC-DB looks very cautious and instable, but WCC-DB has seemingly loosened its previous firm stance rejecting any possibility for a new partnership with GERB. WCC-DB recently conditioned its participation in government formation negotiations with GEBR upon GERB's liberation from its dependencies on Delyan Peevski. GERB should prove its distancing from Peevski by providing support for WCC-DB's package of judicial system laws and measures, Andrey Tsekov from WCC-DB announced in an interview. WCC-DB also proposed talks for a non-political cabinet, headed by a politically neutral PM, who should receive support from the two parties.
As already mentioned, GERB's leader Borissov was not enthusiastic about the idea for a politically neutral PM. He added that if WCC-DB refuses to join a government with the mandate of GERB, WCC-DB should instead seek other parties for partners. Borissov even accused all parties of deliberately failing any efforts for a government formation. However, we still think that a compromise from both GERB and WCC-DB is possible, especially in the case of more negative developments in the Middle East and the Russia-Ukraine war in the next weeks. Certainly, the two parties will have to estimate to what extent they can afford mutual concessions, based on the election results and the chances to find a third party to support their government, either as an official partner, or at least in the parliament.
At this point, both GERB and WCC-DB have openly rejected any option to negotiate with nationalist Vuzrazhdane. WCC-DB has also committed to staying away from MRF-New Beginning of Peevski. Therefore, Ahmed Dogan's ARF, leftist BSP or the small TISP for support would be the acceptable potential partners, in our view. However, GERB's position towards ARF and MRF-New Beginning is not clear yet and we suspect that Borissov prefers to avoid taking a side for as long as possible. Meanwhile, BSP signalled it does not plan to talk to either GERB, nor to the two MRF's wings, which leaves TISP as the most possible choice for a third party to support a GERB-WCC-DB cabinet, in our view. It is another question that TISP might demand a high price for its support, which could eventually fail any talks, which had already happened in the past.
All in all, the post-election political situation will remain complicated, yet we think that negotiations for a government will be held this time and may produce a result. We also expect the Western partners of Bulgaria to attempt to influence GERB and WCC-DB to be more conciliatory with each other. Thus, WCC-DB's idea for a politically neutral PM might eventually gain support as it may bridge the formation of some kind of a government with GERB, TISP, or even ARF or BSP, in our view. We assess the feasibility of this scenario at 45%, because we think that the leading parties will see higher benefit from agreeing on some solution to the political crisis, even if temporary. Otherwise, the series of successive elections will further erode voters' trust and may pave the way for new parties to come and outshine the current ones, in our view. However, the consensus on the right PM will be difficult to achieve and might turn into the bone of contention that may put an end to the negotiations, in our view.
Political deadlock, new snap election - 45%
At least three parties will be necessary to agree in order to make a majority government, which risks to result in a new political deadlock. No party is likely to reach even 80 parliamentary seats in the 240-seated parliament, which may discourage the bigger parties, such as GERB, Vuzrazhdane and WCC-DB, to seek consensus with each other. Although certain winner, GERB cannot reach a number of MPs that would significantly outweigh the number of MPs from the other parties and may not be able to impose its agenda and programme as a firm election winner would normally do, in our view. If WCC-DB turns unable to attract back at least some portion of the lost 300,000 voters in the previous elections, it may decide that it should extend its quarantine from GERB to prevent further loss of popularity. The biggest risk is whether a third party would risk to join as the smallest partner in a cabinet with GERB and WCC-DB, in our view. Talks between at least three participants will certainly lead to clashes over the necessity of different compromises, which could easily exhaust the capacity for tolerance between the parties.
The materialisation of this scenario would be quite unfavourable for Bulgaria's economic policies, EU fund absorption, reputation among foreign partners and its eurozone entry prospects, in our view. The potential scheduling of a new election would further deepen the political crisis and will signify that it cannot be resolved without the emergence of a new party led by leaders with strong popularity. Sociologists and politicians have implied for long time that President Rumen Radev might be the one able to attract strong trust, if he sets up a party. However, there are no signs that Radev or other new actors are planning to establish a new party for the time being.
Expert cabinet with temporary mandate - 10%
If the conversations between parties come to a standstill over unsurmountable differences in opinion about the future PM and the exact power distribution, we expect that the appointment of an expert government with a temporary mandate might be put on the agenda. The motivation of such a project may be related to the pressure of the military conflicts between Russia-Ukraine and in the Middle East, in our view.
We do not see GERB as the initiator of a similar action, but we think that the remaining smaller parties would be inclined to accept such solution. In the past, WCC-DB, TISP and BSP had expressed support for expert cabinet formulas. GERB will most likely oppose such proposal, flagging the parties' avoidance of political responsibility, which means that the realisation of an expert government would be hard. Still, we do not rule out this scenario as parties are increasingly aware that they have been caught in a vicious circle of successive elections.
CONCLUSION
The domestic political crisis has been the result of voters' exhausted confidence in the historically well-established parties in 2020-2021, and their subsequent loss of trust in the new parties which have emerged since then. Economic resilience and the inflation easing have helped to prevent demonstrations of open social unrest so far. The deteriorating political and economic prospects may be also considerably weighing on parties' authentic readiness to take a responsibility for a government, in our view. The political impasse has raised questions for a more comprehensive change in the political system, such as the introduction of a new methodology to distribute party seats in the parliament, or, more radically, for a switch to a presidential republic. While those opinions are not dominant for the time being, it is visible that the current political status quo is no longer capable of generating stability, which eventually risks to undermine Bulgaria's development and to result in institutional failure.
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