Bulgaria’s Government resigned yesterday after mass protests against high power prices and falling living standards, joining a long list of European administrations felled by austerity during four years of debt crisis.
Prime Minister Boiko Borisov, an ex-bodyguard who took power in 2009 on pledges to root out graft and raise incomes in the European Union’s poorest member, faces a tough task of propping up eroding support ahead of an expected early election.
Wage and pension freezes and tax hikes have bitten deep in a country where earnings are less than half the EU average and tens of thousands of Bulgarians have rallied in protests that have turned violent, chanting “Mafia” and “resign”.
The Prime Minister’s final desperate moves on Tuesday included cutting power prices and risking a diplomatic row with the Czech Republic by punishing firms including energy conglomerate CEZ.
CEZ officials were hopeful it would be able to avoid losing its distribution licence and officials from the Bulgarian regulator said the company would not be punished if it dealt with breaches of procedure.
But shares in central Europe’s largest publicly listed company fell another one per cent yesterday.
If pushed through, the fines for CEZ and two other foreign-owned firms will not encourage other investors in Bulgaria, who already have to navigate complicated bureaucracy and widespread corruption and organised crime to take advantage of Bulgaria’s 10 per cent flat tax rate.
Moves by Borisov on Tuesday to blame foreign utility firms for the rise in heating costs was to no avail and an eleventh day of marches saw 15 people hospitalised and 25 arrested in clashes with police.
“My decision to resign will not be changed under any circumstances. I do not build roads so that blood is shed on them,” said Borisov, who began his career guarding the Black Sea state’s communist dictator Todor Zhivkov.
A karate black belt, Borisov has cultivated a Putin-like “can-do” image since he entered politics as Sofia mayor in 2005 and would connect with voters by showing up on the capital’s rutted streets to oversee the repair of pot-holes.