US embassy cable - 05SOFIA1280

UNCLAS  SOFIA 001280 
 
SIPDIS 
 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, BU 
SUBJECT: BULGARIA: COALITION BARGAINING DELAYS GOVERNMENT 
FORMATION; DEAL ON THE HORIZON 
 
Ref: (A) SOFIA 1036, (B) SOFIA 1134, (C) SOFIA 1217 
 
1. (SBU) SUMMARY:  An agreement seems to be taking shape in the 
high-stakes coalition talks between the Bulgarian Socialist Party 
(BSP) and the party of outgoing PM Simeon Saxe-Coburg on the 
formation of Bulgaria's new government.  Simeon, whose role in the 
new government has been the key stumbling block up until now, said 
on July 15 that the parties are moving closer to agreement.  This 
tracks with what we have been hearing from a variety of other 
sources in both the NMSS and the BSP.  After a week intense 
negotiations, there are indications that a deal may be in the 
works, securing a face-saving exit for the former king.  Under the 
plan, BSP leader Sergei Stanishev will head the future coalition 
government while Simeon will chair an advisory coalition council. 
Potential hurdles remain, however, and difficult negotiations 
continue.  President Georgi Purvanov has put pressure on the 
parties to hammer out a deal by indicating that, after several 
delays, he will give the Socialists on Monday a mandate to form a 
government.  END SUMMARY 
 
2. (U) As a first step towards a coalition agreement, the BSP, NMSS 
and the MRF agreed last weekend to a joint document outlining the 
coalition government's priorities.  Since then, however, the 
Socialists and the NMSS seem to have made little progress on the 
key issue of who should lead the next government.  There has been 
plenty of public posturing by both sides.  Both the NMSS and the 
BSP reiterated that their leader should hold the PM post, while 
informally indicating they were ready to compromise. 
 
MULLING FACE-SAVING EXIT FOR THE KING 
 
3. (SBU) The BSP, which won an inconclusive victory and fell short 
of a majority, has struggled to coax the defeated National Movement 
for Simeon II (NMSS) into a broad coalition, including also the 
mainly ethnic-Turkish Movement for Rights and Freedoms (MRF).  The 
key stumbling block, however, was the future role of Simeon, who 
finds it hard to part with his job.  In the last 24 hours, sources 
from both the NMSS and BSP have told us Simeon is prepared to 
compromise on his demand to hold the PM post, but the details 
remain a stumbling block. 
 
4. (SBU) BSP and NMSS insiders tell us the negotiating teams have 
outlined a deal under which Sergei Stanishev, the 39-year-old 
Socialist leader, will head the government while Simeon will chair 
a body, called the Coalition Council.  The council, which will have 
only advisory functions, is specifically designed to secure a high- 
profile ceremonial role for the former king.  Simeon's apparent 
change of heart can be explained at least in part by the fact that 
Bulgarian media have been widely portraying him as the main culprit 
for current political uncertainty that may hamper Bulgaria's EU 
accession chances. 
 
HORSE-TRADING GOES ON 
 
5. (SBU) Obstacles to a coalition agreement remain, however, and 
intense horse-trading continues.  The NMSS is apparently insisting 
that the mandate to form a government be given to Simeon, who would 
then choose Stanishev to lead the government.  A senior BSP 
official told us such a move was absolutely unacceptable.  It is 
not clear whether NMSS is serious about their demand, or just using 
it to obtain maximum leverage in the struggle for ministerial 
seats.  Currently, the NMSS is said to be seeking half of the 
cabinet positions, another demand which the BSP sees as 
unacceptable.  A meeting between the BSP and the NMSS negotiating 
teams was scheduled for Friday afternoon, and talks will continue 
over the weekend as well.  After postponing the meeting several 
times, the BSP leadership will meet July 17 to approve the 
coalition formula and name a PM-designate. 
 
SEVEN-DAY COUNTDOWN MAY START MONDAY 
 
6. (U) President Purvanov put further pressure on the main 
political parties to hammer out a deal by indicating that, after 
several delays, he will give the Socialists on Monday a mandate to 
form a government.  The PM-designate will have seven days to 
present the government line-up, which then needs to be approved by 
parliament (Ref. A).  Winning parliamentary approval for a three- 
party coalition should not be a problem, because the BSP, NMSS and 
MRF together control 169 seats in the 240-seat parliament.  If the 
Socialists meet the timeline, the new government could be sworn in 
by the end of this month.  If the Socialists fail, Purvanov will 
let the second biggest party, Simeon's NMSS, try to form a 
government. 
 
EX-KING IS THE KING-MAKER 
 
7. (SBU) COMMENT:  Were it not for the fact that he is a former 
child king, Simeon would be just another leader of a runner-up 
political party, and would have no basis upon which to claim the PM 
position.  However, his "royal" status has allowed him -- some 
would say compelled him -- to demand far more than he deserves 
politically.  As a result, the king's men are likely to play 
 
 
hardball until the very last minute, trying to secure the best deal 
for Simeon and win more ministerial seats.  If the President gives 
the Socialists on Monday a mandate to form a government, the seven- 
day countdown will put further pressure on the parties to finalize 
a deal.  Although the prospects for a three-party deal seem to have 
increased, potential hurdles remain, and when it comes to Simeon, 
surprises are always possible.  However, any further delay in 
forming the new government, which needs to pass EU-linked reforms 
by early fall, may endanger Bulgaria's 2007 EU entry bid. END 
COMMENT