Tags: Bulgaria | politics | Oresharski

Bulgarian Prime Minister Tenders Resignation on Bank Crisis

Image: Bulgarian Prime Minister Tenders Resignation on Bank Crisis
Bulgaria's Prime Minister Plamen Oresharski. (Nikolay Doychinov/AFP/Getty Images)

Wednesday, 23 Jul 2014 01:31 PM

Bulgarian Prime Minister Plamen Oresharski offered to step down after the worst banking crisis in 17 years threatened the Balkan country’s economy, setting the clock for early elections on Oct. 5.

Lawmakers must approve Oresharski’s letter of resignation to parliament, said the chamber’s spokeswoman, Stanislava Ivanova, which will push Bulgaria to a snap poll three years ahead of schedule.

“The resignation will be included on parliament’s agenda, and it will be voted on by lawmakers tomorrow or on Friday,” Ivanova said by phone today.

The ruling Socialists, who came to power in May 2013, are stepping down after the opposition Gerb party of former Prime Minister Boyko Borissov won European Parliament elections and accused it of bringing the country to ruin following bank runs at the nation’s third- and fourth-largest lenders by assets this month.

The central bank placed Corporate Commercial Bank AD under supervision on June 20 after it ran out of liquidity amid media reports about a feud between the majority shareholder and a large depositor, a member of parliament who withdrew his funds.

The Socialist-led coalition came to power on pledges to boost growth and spending on social benefits. It was beset by recurrent rallies against what Bulgarians considered a corrupt political system in the poorest European Union member, which led to a weak showing in May 25 European Parliament elections.

The European Commission gave the government approval to extend a 3.3 billion-lev ($2.27 billion) credit line to lenders after police arrested men they said triggered a another run on First Investment Bank AD. The run on First Investment, which paid 800 million lev in deposits to clients in one day, was contained, Oresharski said on July 4.

Now authorities rely on Corp Bank’s shareholders to seek ways to rescue it from bankruptcy after parliament shot down a cabinet proposal to recapitalize the bank.

President Rossen Plevneliev said on July 21 he expects the interim cabinet “to have a new approach in many sectors,” including energy policy, according to an e-mailed statement.

Oresharski pushed ahead with the South Stream natural-gas pipeline project intended to ship Russian fuel under the Black Sea across the Balkans to Europe.

He was forced to say he’s halting it last month after the EU’s executive arm sent a letter asking for work to be suspended because of concerns the Balkan country may have broken the bloc’s public procurement laws by favoring local and Russian bidders.

The cabinet also signed a preliminary agreement on Dec. 12 with Westinghouse Electric Co. LLC to build a new unit at the Kozloduy nuclear power plant.

“We are leaving the country in a stable financial condition despite ungrounded talks of bankruptcy,” outgoing Finance Minister Petar Chobanov told reporters in Sofia today. “The fiscal reserve is more than 8 billion lev, which gives room for flexibility and dealing with undesirable challenges.”

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Bulgarian Prime Minister Plamen Oresharski offered to step down after the worst banking crisis in 17 years threatened the Balkan country’s economy, setting the clock for early elections on Oct. 5.
Bulgaria, politics, Oresharski
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2014-31-23
Wednesday, 23 Jul 2014 01:31 PM
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