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Bulgarian Election Shows Need to Clean House

Summary:
Bulgarian Election Shows Need to Clean House It looks as though the center-right Citizens for European Development party won Bulgaria’s early elections, the same party that triggered the vote by resigning from government amid protests in February. So has anything changed? The short answer is yes. The elections show that Bulgarians have lost all faith in a corrupt elite, and the next government — whatever shape it takes — is likely to be weak and unstable. The previous Cabinet, led by Prime Minister Boyko Borissov, resigned after violent protests around the country. The immediate impetus for this outburst of public anger was high energy prices, but the subtext was disappointment. Bulgaria has been, in many ways, a model of fiscal probity in recent years. The country’s public-debt burden and government deficit are among the lowest in the European Union. Growth has been modest but positive since the shock of 2008-2009. The unemployment rate is almost 12 percent, which compares favorably with most other southern EU countries. At the same time, though, Bulgaria is the poorest EU member state, with an average monthly wage of only 400 euros (9). There is widespread disappointment in the Balkan country that EU membership (Bulgaria joined in 2007) hasn’t noticeably improved living standards.

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Bulgarian Election Shows Need to Clean House

It looks as though the center-right Citizens for European Development party won Bulgaria’s early elections, the same party that triggered the vote by resigning from government amid protests in February. So has anything changed?

The short answer is yes. The elections show that Bulgarians have lost all faith in a corrupt elite, and the next government — whatever shape it takes — is likely to be weak and unstable.

The previous Cabinet, led by Prime Minister Boyko Borissov, resigned after violent protests around the country. The immediate impetus for this outburst of public anger was high energy prices, but the subtext was disappointment.

Bulgaria has been, in many ways, a model of fiscal probity in recent years. The country’s public-debt burden and government deficit are among the lowest in the European Union. Growth has been modest but positive since the shock of 2008-2009. The unemployment rate is almost 12 percent, which compares favorably with most other southern EU countries.

At the same time, though, Bulgaria is the poorest EU member state, with an average monthly wage of only 400 euros ($519). There is widespread disappointment in the Balkan country that EU membership (Bulgaria joined in 2007) hasn’t noticeably improved living standards. As Ivan Krastev and Georgi Ganev argued on Bloomberg View last month, the austere safety-first economic policies that reassure wealthy Germans have the opposite effect on Bulgarians, for whom lack of change means continued poverty.

To read the rest, please see the original piece on Bloomberg View.

Megan Greene
Megan Greene is the Chief Economist at Maverick Intelligence, with a particular focus on Europe. She is also a senior fellow at the Atlantic Council, a columnist with Bloomberg and a senior research fellow at Trinity College Dublin. The opinions expressed here are her own and do not reflect those of any employers. Ms Greene offers a strictly independent voice without a political or investment agenda.

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