Caretaker government must find stability, analysts say

14/03/2013

The caretaker government took office on Wednesday.

By Svetla Dimitrova for Southeast European Times in Sofia -- 14/03/13

Bulgarian interim Prime Minister-designate Marin Raykov (right) and outgoing Prime Minister Boyko Borisov speak with reporters on Wednesday (March 13th) during a ceremony to transfer power to the new government. [AFP]

Analysts are urging Bulgaria's caretaker government to secure economic stability in order to avoid a new crisis as it replaces the cabinet of the centre-right party GERB party.

The main task of interim Prime Minister Marin Raykov and his 16-member team is to organise early parliamentary elections scheduled to take place on May 12th, while running day-to-day business as well.

Sofia-based political scientist Vladimir Shopov, founder of Sophia Analytica Ltd, said, however, that it is "not be enough" for President Rosen Plevneliev to just appoint an interim cabinet.

This should be "an agenda-setter government," operating within the frames of its constitutional powers, he told SETimes, adding that its first task "will be to create a sense of stability, including financial certainty."

If politicians fail to achieve that goal, Bulgaria would be "staring at the abyss again," Shopov warned, in a reference to the 1996-1997 crisis in Bulgaria that triggered the introduction of the currency board arrangement in the country.

"Financial stability is the key precondition for all reasonable scenarios out of the current stalemate," he said.

According to Georgi Ganev, programme director at the Centre for Liberal Strategies think-tank in Sofia, the failed labour market policies are among the "fundamental" reasons for the protests in recent weeks.

The caretaker government, appointed by Plevneliev, took office on Wednesday (March 13th). Plevneliev plans dissolve parliament on Friday.

Speaking at the transfer of power ceremony in Sofia on Wednesday, Raykov, 52, pledged fair and transparent elections.

The interim cabinet will remain in power until a new regular government is appointed following the elections. Given the current political turmoil, many analysts expect the May poll to head to a repeat vote.

Raykov will be assisted by three deputies -- the ministers of regional development and of labour and social policy, Ekaterina Zaharieva and Deyana Kostadinova, and Iliyana Tsanova, operations leader at the European Bank for Reconstruction and Development in London, who will be in charge of EU fund management.

Petya Parvanova became the first woman in the Balkan country's history to fill the interior ministry post. Assen Vassilev took office as economy minister, while Kalin Hristov, who has been serving as a Bulgarian National Bank deputy governor since 2009, was appointed finance minister.

By picking Hristov, Plevneliev sent "a clear signal that he will not allow any attempts to bring down the currency board arrangement" that has helped maintain financial stability in Bulgaria since 1997, Georgi Angelov, a senior economist at the Open Society Institute in Sofia, told SETimes.

He said there have been several occasions in the past when Hristov and the bank clashed with outgoing finance minister Simeon Djankov over his ideas to increase spending and reduce the fiscal reserve.

"It has become clear recently that it is the decline in the fiscal reserve that creates problems and tensions, the bank was right to warn of those risks," Angelov said.

With no parliament in place, Raykov's cabinet cannot propose or pass new laws, and will operate within the frames of the 2013 state budget approved by the outgoing legislature.

This content was commissioned for SETimes.com.