WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

All opinion polls prior to the presidential elections were consistently suggesting another easy win for GERB, and Mr. Borisov appeared so confident in this victory that he offered to resign in the case of a defeat. There were no apparent political or economic reasons for such a declaration: the GERB-led coalition enjoyed a comfortable majority in parliament while the economy was showing signs of sustained recovery for the first time since the 2008 global financial crisis. In these circumstances Mr. Borisov’s move looked more like a macho gamble of low perceived risk by a macho type politician. However, the elections delivered exactly the opposite result: a comfortable win by Mr. Radev and Mr. Borisov found himself trapped in his pre-election pledge. Eventually he did resign, pushing the country into an unprecedented political crisis.

Little ground for conventional explanations

The reasons for the surprising change in spirit by the Bulgarian public that surfaced in the elections are still unclear and difficult to explain or interpret. In any case, the simplified caricature (a confrontation between a Western-minded and a pro-Russian politician won by the latter) which is often presented by media outside Bulgaria seems to be very distant from the reality on the ground; in fact, foreign policy issues likely played only a marginal role in the presidential elections. Traditional factors substantiated by economic success or failure attributed to the government in office also do not offer convincing arguments as the economic situation in Bulgaria was consistently improving during the last two years. Nor can this be explained by a shift from right to left in the overall political attitudes: the electoral support for the Socialist party as such is much below that of GERB, and had the socialists come up with a party candidate, the result would have been very different.

The elites’ drift away

Most likely what happened in Bulgaria is another piece of evidence of the growing gap between political elites and societies in many parts of the world, resulting in a tide wave of an openly manifest disillusionment by the public with traditional politics and business as usual which surfaced in the Brexit debacle and later in the US presidential elections. Moreover, the personality of the political newcomer Radev (a former aviation general) and his moderate stance on most political issues seemed appealing to the general public and the interpretation of a break from the past.

Political turmoil in Bulgaria

The current political turmoil in Bulgaria is exceptional – not because of the gravity of the political crisis (which is not the case) but due to the unique circumstances in which it takes place, namely a period of changeover at the highest political level. While the president has relatively limited constitutional powers, he is authorised to nominate a caretaker government in case the parliament proves incapable of electing one by a majority vote. It is also the president who calls early parliamentary elections in these circumstances. However, according to the constitution, the outgoing president (in this case Rosen Plevneliev) cannot call early elections within the last three months of his term in office, which is the case at the present moment.

As of the moment of writing this note, the outgoing president was still holding consultations with the parties represented in the current parliament in the hope of modelling a new coalition that would back another government without going to early elections. However, chances for this to happen are slim and in all likelihood Mr. Plevneliev will have to appoint a caretaker government. The formal changeover at the top is due to take place in the second half of January 2017 when Mr. Radev will take over. It is then him who would have to call early elections which, according to the constitutional rules, cannot take place before the end of March or beginning of April 2017. Mr. Radev will also have the power to sack the government appointed by Mr. Plevneliev and pick his own caretaker government. But such a decision will be left at his discretion and he may also refrain from this additional changeover.

Economic consequences?

The current political turbulence however is mostly confined within the political elites and does not reflect a major societal turmoil. In turn, its economic consequences, if any, will mostly be associated with the uncertainties due to the way the current political stalemate will be resolved. The economy seems to be in relatively good shape and there are no apparent reasons to expect that the political crisis will generate perceptible economic shocks. Of course, the early parliamentary elections in the spring of 2017 may also deliver some surprises but given the unsettled current political situation it is still premature to speculate on that. In a benign scenario for the short run (which is the most likely one), the constitutional steps outlined above will be performed in an orderly manner paving the way for a next political cycle.