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The birth of a four-party coalition reduces, but does not eliminate, political uncertainty due to potential disagreements among its members. All the details of the agreements between them have yet to emerge. The coalition is likely to last at least a year, but it is possible that the resignation of ministers and a reshuffle of responsibilities in the government.
Some observers point out that there is no coalition agreement, but bilateral agreements signed by each of the three smaller parties with “We continue to change”. As well as the fact that there seems to be a fifth partner – President Rumen Radev, because four of the ministers, and those in many key positions, are from the caretaker government selected and appointed by him.
The tone in which the rating agency Fitch, the analytical and forecasting division of the IHS Markit agency and Western publications write about the new government that has chosen Bulgaria is restrainedly optimistic. The main reason is the expectation that this will put an end to months of uncertainty and at least some stabilization of the political system. And most of all – hope that in early 2022 Bulgaria will receive approval from the European Commission and the Council of the EU of the Recovery and Development Plan and billions of donated euros will flow to the economy.
As well as expecting Prime Minister Kiril Petkov to fulfill at least his promise to fight corruption and block the corruption channels in which, according to the caretaker cabinet, billions have sunk. This was noted by the German public media ARD, the agencies DPA, Reuters, AFP, APA, the German-language edition of Deutsche Welle …
The deal for the government in Bulgaria points to more stability and continuation of the current policy, reduces the short-term political uncertainty, which could have hindered the timely implementation of the Recovery Plan, writes “Fitch” at the beginning of his first comment on Monday. According to the agency, “the result seems to confirm our view that this year’s political inconsistency will not pose a risk to economic policy or Bulgaria’s determination to adopt the euro. The new government’s focus on improving governance could boost the country’s rating in the medium term.” .
The commentary on “Continuing Change” is different from not only talking about fighting corruption like other opponents of the status quo, but also “developing an economic agenda focusing on improving the business environment, attracting foreign direct investment and increasing productivity through education.” and institutional reforms “.
Immediately after these encouraging words, Fitch added about the potential disagreements between the coalition partners and the lack of information about what exactly they agreed on. The opinion of the agency is that rather it is confirmed that has a sufficiently broad commitment to sound fiscal and macroeconomic policies and the adoption of the single currencyand that no anti-systemic party has proposed a change in relations with the EU so far.
The solid 6.6 billion euros (10% of GDP in 2021) expected as grants under the Next Generation EU mechanism are very important as a political “anchor” for the coalition to keep it implementing the promised anti-corruption measures and judicial reforms, because access to these means is bound by the rule of law, reminded by “Fitch”. But improving government governance indicators will take several years, and reforms are likely to provoke coalition frictions.
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Global Insight, the IHS Market’s forecasting unit, is much more specific about where these frictions will be, on what occasion and with which government partners. The most problematic point seems to be energy, entrusted to “There are such people”. There are old structural problems in the public sector, and the energy transition will be hampered by coalition disputes – Democratic Bulgaria, on the one hand, is the only one with more ambitious goals for the coal sector, while the BSP, on the other, opposes rapid closure. of mines and thermal power plants in order to preserve jobs there for as long as possible.
Therefore, decarbonisation, which the European Commission insists on, is more likely to happen faster in Bulgaria’s transport than in energy.
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Gobal Insight defines PP as “ideologically indeterminate” and do not rule out the resignation of ministers and the reshuffle of the coalition by the end of 2022 given the different policy emphases that its members insist on. The BSP and parts of the ITN initially appear to be the most risky places to step down from the government, the analysis said.
It should be received with caution, because after the elections on November 14 the expectation of the same unit was for long negotiations for a coalition, and now it says that they ended only in a month and with mechanisms for coalition decisions and joint legislative initiatives , which point to the possibility of resolving potential disputes within the coalition. This does not mean that everything will go smoothly – its members have different ideological orientations and voters, which is why many reform policies will require cooperation between ministries, otherwise clearly divided along party lines.
“We continue to change” and “Democratic Bulgaria” appear to be the driving force behind the fight against corruption, initiatives for more transparency, better tax collection, digitalisation and good governance. All four parties believe that the GERB government has built a corrupt administration that has only deepened inequality in society, and it is likely that changes in the KPCONPI and the responsibility of the chief prosecutor will follow. If this happens in the first months of governance, the government will be able to focus on other priorities, including better governance of public procurement and state-owned companies and agencies.
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According to Global Insight, it needs to be monitored whether BSP and ITN MPs will begin to express doubts about the government’s program and priorities and to take positions like the opposition – in particular GERB – because this will thin the parliamentary majority of the coalition, ie. will reduce the chances of approving laws and decisions introduced by the cabinet.
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The chances for anti-government protests, if well-founded allegations of corruption against government parties emerge, or if civil society sees a possible easing of anti-corruption measures as a blurring of reforms. Such processes will signal a growing risk of split in the coalition. Vaccination policies and restrictive measures due to the pandemic are the other “hot spot” – if a long protest with thousands of participants is formed against them, it could lead to resignations not only in the Ministry of Health, but also increase the likelihood of coalition collapse.
Not everything ahead is fraught with risk – if in February-March the European Commission approves the Bulgarian Plan for Reconstruction and Development, it will mean that the new government manages to respond convincingly to the inquiries of Brussels. As the use of the allocated funds is monitored by other EU countries, their distribution in Bulgaria should show the extent to which the various ministries – especially those of energy, finance and environment – are able to successfully cooperate. If the result is positive, it will reduce the risks associated with government contracts and the stability of the government, according to IHS Markit.
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Without many predictive elements, but with estimates, are the media publications about the new government.
“A coalition of four parties that could hardly be more different,” the correspondent wrote in his analysis. ARD Clemens Ferencote, quoted by SG “They are united by one goal: to prevent the party of the former head of government, the national conservative Borissov, from returning to power,” the author commented. Agency DPA also emphasizes Petkov’s words that “zero tolerance” will be demonstrated under corruption under his government… In analysis on AFP It says: “The four parties are united in their position against Borissov, whom they accuse of corruption. Now they intend to fight this rampant corruption and reform the judiciary. In addition, Petkov wants to speed up the protracted immunization campaign.”
“There are as many jobs as you want. The country does not offer enough prospects to its young generation. The population is galloping. in “Süddeutsche Zeitung”.
“Mathematically, this government alliance was the only possible combination without GERB and the MRF, which have become a symbol of behind-the-scenes politics,” he told SETimes. the German-language edition of Deutsche Welle Vessela Cherneva from the European Council on Foreign Relations. According to her, the new government should be assessed according to the “principle of unity and cooperation”, which the parties have written in the coalition agreement. “It remains to be seen how serious they are.” Christopher Nering’s article ends with a quote from Hristo Ivanov’s statement on Saturday that this seems to be a transitional government and that there will probably be political stability only after the local elections.
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Reuters He spoke of the coalition as an unprecedented combination of left-wing socialists, anti-systemic ITNs and center-right Democratic Bulgaria, and that Kiril Petkov seemed focused on achieving results while navigating the union of political opponents. energy, poor vaccination and preparations for joining the eurozone in two years.
Bloomberg Emphasizes the oft-repeated promise of “zero tolerance for corruption”, recalling that it has kept Bulgaria out of Schengen and requires the European Commission to make progress in judicial reforms in order to approve reconstruction and development funds.
“Although it has secured a parliamentary majority after a month of negotiations, Petkov’s cabinet is unlikely to survive the entire four-year term. His coalition includes parties that until recently refused to co-operate,” Bloomberg reported. The text reminds that at least as far as the adoption of the euro is concerned, not everything depends on Bulgaria, because there are countries in the eurozone that do not want to admit new members and convincing them could be a serious challenge for the new government.
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