SOFIA (Reuters) – Bulgaria’s government resigned on Wednesday after violent nationwide protests against high power prices, joining a long list of European administrations felled by austerity during Europe’s debt crisis.
Prime Minister Boiko Borisov, a former bodyguard who swept to power in 2009 on pledges to root out corruption and raise living standards in the European Union’s poorest member, now faces a tough task to prop up eroding support ahead of a probable early election.
Wage and pension freezes and tax hikes have bitten deep in a country where living standards 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”.
On Tuesday, 11 people were hospitalised – including one man bleeding heavily from the head – and 11 arrested after protesters threw flares at police, who fought demonstrators with shields and truncheons.
“I will not participate in a government under which police are beating people,” Borisov, who began his career guarding the Black Sea state’s communist dictator Todor Zhivkov, said as he announced his resignation on Wednesday.
Parliament is expected to accept the resignation later in the day.
The spark for the protests was high electricity bills, after the government raised prices by 13 percent last July. But it quickly spilled over into wider frustration with Borisov’s domineering manner and unpredictable decision making.
The prime minister made sacrifices in an attempt to cling on, sacking his finance minister, cutting power prices and risking a diplomatic row with the Czech Republic by punishing foreign-owned companies, a move that conflicted with EU norms on protection of investors and due process.
Borisov’s rightist GERB party is the dominant faction in parliament but will not take part in talks to form a new government, Interior Minister Tsvetan Tsvetanov said, indicating that an election planned for July will now be held early.
“He made my day,” student Borislav Hadzhiev, 21, in central Sofia said, commenting on Borisov’s resignation. “The truth is that we’re living in an extremely poor country.”
GERB’s popularity has held up well and it still leads, just, in the polls, largely because budget cutbacks have been relatively mild compared with those in many other European countries. Salaries and pensions were frozen rather than cut.
But the last opinion poll, taken before protests grew last weekend already showed the opposition Socialists were nearly tied with the ruling party and analysts said the protests had boosted the Socialists’ chances.
Unemployment in the country of 7.3 million is far from the highs hit in the decade after the end of communism but remains at 11.9 percent and average salaries are stuck at around 800 levs ($550) a month.
Millions have emigrated in search of a better life, leaving swathes of the country depopulated and little hope for those who remain.
The measures announced this week has also put the country on a collision course with the EU and financial investors without easing the tension at home.
Czech Prime Minister Petr Necas demanded an explanation from Bulgaria and accused it of “politicising” the power sector by threatening to revoke the electricity distribution licence of central Europe’s largest listed company CEZ, 70 percent of which is owned by the Czech state.
There have also been fines for another Czech company, Energo-Pro and Austria’s EVN.
The precedent is unlikely to encourage other foreign investors, who already have to navigate complicated bureaucracy and widespread corruption and organised crime if they want to take advantage of Bulgaria’s 16-percent flat tax rate.
“The resignation is the only responsible move,” said Kantcho Stoychev, an analyst with pollster Gallup International. “It also gives Borisov some legitimacy to stay in political life in the future, despite the violent police actions last night.”
The Obama administration sought Tuesday to increase pressure on Europe to brand Hezbollah a terrorist group after the Bulgarian government implicated the militants in a fatal attack on Israeli tourists last summer.
Bulgaria blamed the Iran-backed group for the July bus bombing in the Black Sea city of Burgas, making official what U.S. and Israeli terrorism officials had alleged from the start. The attack killed five Israelis and their Bulgarian driver.
Bulgaria said evidence showed that two of the people involved in the attack were members of Hezbollah’s military wing and that they were acting as part of a campaign against Israeli targets worldwide. The United States and Israel assisted with the investigation.
The allegation of a direct Hezbollah terror campaign on European soil escalates pressure on the European Union to reconsider its treatment of Hezbollah. The E.U. has resisted past U.S. and Israeli entreaties to designate Hezbollah a terrorist group.
Secretary of State John F. Kerry issued a statement urging Europe to crack down on Hezbollah. “We need to send an unequivocal message to this terrorist group that it can no longer engage in despicable actions with impunity,” said Kerry.
Several influential members of the 27-nation E.U. alliance have argued, however, that Hezbollah is both a political and military organization and that a blanket terrorism designation could be counterproductive. Hezbollah supporters move through Europe and raise money with little obstacle.
Kerry discussed the Bulgarian allegation in a telephone conversation with E.U. foreign policy representative Catherine Ashton, said Victoria Nuland, the State Department spokeswoman. Nuland said Ashton is “well aware” of the U.S. position on Hezbollah but would not say whether Kerry specifically lobbied for a change.
But, Nuland said, “our hope and expectation is that this clear evidence of Hezbollah operation on European soil will be galvanizing to their internal conversations.”
Tsvetan Tsvetanov, the Bulgarian interior minister, said at a news conference in Sofia, the capital, that two of the three attackers had genuine passports from Australia and Canada. He said there was evidence that they belonged to Hezbollah’s military wing and had been financed by the group.
No one has been arrested in connection with the attack.
Ashton’s spokesman, Maja Kocijancic, said the E.U. would discuss the implications of Hezbollah’s involvement in an attack on European soil.
The United States labeled Hezbollah a terrorist organization in 1997, which bars the group from using U.S. banks and prohibits most diplomatic contact.
“Our concern is that in the context of our squeezing them, they look for other places to do their banking, to do their plotting, et cetera,” Nuland said. “And our concern has been that Europe has been one of the places that they have exploited.”
White House counterterrorism chief John Brennan urged Europe to “take proactive action to uncover Hezbollah’s infrastructure and disrupt the group’s financing schemes and operational networks in order to prevent future attacks.”
Brennan did not expressly call on the E.U. to revisit the question of terrorism designation, but others did.
“This brazen act of terrorism by Hezbollah was committed on European Union soil,” said Sen. Robert P. Casey Jr. (D-Pa.), who with 74 other senators last year wrote to the E.U. urging action. “Brussels can no longer delay.”