US embassy cable - 05SOFIA1448

UNCLAS  SOFIA 001448 
 
SIPDIS 
 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, BU 
SUBJECT: BULGARIA: THREE-PARTY COALITION FINALLY FORMS A NEW 
GOVERNMENT 
 
Ref: A) SOFIA 1429  B) SOFIA 1329 C) SOFIA 1404 D) SOFIA 
1380 E) SOFIA 1363 F) SOFIA 1325 G) SOFIA 1124 
 
1. (SBU) SUMMARY:  Nearly eight weeks after general 
elections, the three largest parties in parliament are 
poised to form a coalition government.  In an extraordinary 
session scheduled for later today (August 16), Parliament is 
expected to approve the Bulgarian Socialist Party's (BSP) 
Sergei Stanishev as  Prime Minister, along with eight  BSP 
ministers. The National Movement for Simeon II (NMSS) and 
the mainly ethnic-Turkish Movement for Rights and Freedoms 
(MRF) will pick up five and three ministries respectively. 
END SUMMARY 
 
A THREE-PARTY COALITION GOVERNMENT FORMED 
 
2. (SBU) The BSP, which won an inconclusive victory June 25 
and fell short of a majority, signed on August 15 a 
coalition agreement with the defeated NMSS and the MRF.  If 
approved at an afternoon session of parliament on August 16, 
this coalition will have the largest parliamentary majority 
in Bulgaria's post-communist history, with a total of 169 
MPs in the 240-seat parliament.  This majority is more than 
the two-thirds required to pass constitutional amendments 
necessary for EU accession.  The coalition partners and the 
President moved with unprecedented speed to secure earlier- 
than-normal parliamentary approval of Bulgaria's new 
government.  Less than two hours after the parties signed 
the agreement, the President -- who has publicly declared 
his frustration with the slow pace of negotiations -- handed 
the mandate to PM-designate Sergei Stanishev, appointed as 
the MRF's candidate.  Stanishev previously failed to form a 
government using the BSP's mandate. 
 
3. (SBU) The parties have reportedly agreed to focus on the 
central  issues of "European integration, economic growth 
and social responsibility."  Behind this public agreement, 
however, lie serious differences on major policy issues, 
including privatization, fiscal policy and government 
administration.  These differences are supposed to be 
resolved by a proposed Coalition Council comprised of five 
representatives from each party.  It is designed to give the 
two smaller coalition partners an equal voice on matters of 
national importance and act as a counterweight to the formal 
cabinet, where the BSP holds an absolute majority.  It 
remains to be seen whether this informal council will have 
any real effect on governance. 
 
LINE-UP OF THE NEW GOVERNMENT, WHO GETS WHAT 
 
4. (SBU) Many ministers were unchanged from the BSP's first 
attempt to form a government (ref B), including the two 
prominent BSP deputy leaders, Rumen Petkov and Rumen 
Ovcharov, who were named Minister of Interior and Minister 
of Economy and Energy, respectively.  The BSP has submitted 
Ivailo Kalfin as Minister of Foreign Affairs and Plamen 
Oresharski -- a generally well-respected technocrat -- as 
Finance Minister.  The biggest cabinet surprise is the 
absence of a few of the NMSS' stars.  Plamen Panayotov, who 
served as Deputy Prime Minister in the Simeon cabinet and is 
NMSS Deputy Chairman, unexpectedly disappeared from the 
cabinet list late August 15. Outgoing Finance Minister Milen 
Velchev is also absent.  One frustrated NMSS contact told us 
his party did much worse in this cabinet than it would have 
in the first mandate proposal turned down by the NMSS.  He 
believed the biggest losses were the economic  ministries, 
which left no post for Velchev.  The media is already 
reporting Velchev may be a candidate for Mayor of Sofia. 
In another unexpected move, Daniel Vulchev, who is a member 
of the NMSS political council, is proposed to be Deputy 
Prime Minister and Minister of Education.  The line-up also 
includes the outgoing Interior Minister Georgi Petkanov, who 
is named Minister of Justice.  In addition, the NMSS has 
nominated Vesselin Bliznakov as Minister of Defense. 
Bliznakov, 61, is currently an NMSS MP, a member of the 
party's Political Council and General Secretary of NMSS. 
 
WHAT ABOUT SIMEON 
 
6. (SBU) The coalition agreement is the culmination of 
extensive negotiations with the defeated party of outgoing 
PM Simeon Saxe-Coburg.  Simeon will play no role in the new 
government, but will retain his position as party leader. 
The outgoing PM told the press that NMSS has joined the 
coalition with the assurance that Council of Ministers' 
decisions will be taken by consensus.  NMSS insiders have 
told us privately, however, that they expect problems with 
the BSP on reaching consensus on some important issues. 
 
7. (SBU) COMMENT:  Bulgarians are breathing an exasperated 
sigh of relief now that a new government seems in place.  In 
addition to delays in the EU accession process, the current 
 
carryover government has been unimpressive in its response 
to severe flooding.  President Purvanov's public 
chastisement of the political parties -- and likely private 
prodding -- appear to have focused the leaders on forming a 
government that will be stable in the short-to-medium term. 
This should be long enough to get Bul:uria through the 
difficult EU accession process in the next several months. 
However, as with all coalition governments, seemingly small 
disagreements could unwind this broad but very diverse 
group.  The broad nature of the coalition should, however, 
mitigate against any abrupt changes in economic or foreign 
policy.  Moreover, most ministries that are important to the 
USG are headed by moderates who are well know to us. 
Septels will report in more detail on the composition of the 
government and its implications for U.S. interests.  END 
COMMENT