R 081444Z MAY 97
FM AMEMBASSY SOFIA
TO SECSTATE WASHDC 9723
INFO EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 04 SOFIA 003097


E.0. 12958:  DECL:  4/30/07
TAGS: PREL BU
SUBJECT:  BULGARIA:  BUILDING C0NSENSUS AND F0RMING A
G0VERNMENT

REF:  SOFIA 2639

1.(U)  CLASSIFIED BY AMBASSAD0R B0HLEN.  REAS0N:
1.5(B,D).

2.(C)  SUMMARY:  BULGARIA'S UNI0N 0F DEM0CRATIC F0RCES
(UDF), THE LEAD-PARTY IN THE C0ALITI0N WHICH W0N THE
APRIL 19 PARLIAMENTARY ELECTIONS, HAS SET TO WORK TO
BUILD A STRATEGIC, REFORMIST MAJ0RITY IN PARLIAMENT AND
A BROAD CONSENSUS 0N NATI0NAL PRI0RITIES OF ECONOMIC
REF0RM, LAW AND 0RDER AND EUR0-ATLANTIC INTEGRATI0N,
WHILE ALSO F0RMING A NARR0W C0ALITION G0VERNMENT DRAWN
LARGELY FR0M ITS 0WN LEADERSHIP.  THE NEW G0VERNMENT, TO
BE LED BY UDF PARTY CHAIRMAN IVAN K0ST0V, WILL HAVE
AMPLE C0NTINUITY WITH ITS CARETAKER PREDECESS0R AND WILL
WILLINGLY TAKE PRESIDENT ST0YAN0V'S LEAD IN F0REIGN
P0LICY.  A STREAMLINED PARLIAMENT, WHICH C0NVENED 0N MAY
7TH, WILL V0TE 0N A 7-P0INT DECLARATI0N 0F NATI0NAL
PRI0RITIES, PR0POSED BY THE UDF AND AMENDED THROUGH
CONSULTATION WITH 0THER PARLIAMENTARY FACTIONS.  THE
UDF'S PARLIAMENTARY GROUP'S AGENDA INCLUDES PASSAGE, IN
THE FIRST 30-40 DAYS, OF LAWS NECESSARY T0 IMPLEMENT THE
CURRENCY BOARD AND ADDITI0NAL LEGISLATIVE MEASURES T0
ADDRESS CRIME AND CORRUPTION.   END SUMMARY.

FINAL ELECTION RESULTS
----------------------

3.(U)  FINAL ELECTI0N RESULTS (BEL0W) WERE MUCH AS
EXPECTED, GIVING THE UNITED DEMOCRATIC FORCES COALITION
(UTD DF) A 137 SEAT MAJ0RITY IN THE 240-SEAT BULGARIAN
PARLIAMENT.  THE ELECT0RAL SEA CHANGE FROM 1994 WHEN THE
BULGARIAN SOCIALIST PARTY (BSP) WON 125 SEATS, WAS
REFLECTED IN THE UTD DF'S INROADS INT0 PREVI0USLY
BSP-D0MINATED RURAL AND ELDERLY ELECT0RATES.  F0R THE
FIRST TIME, THE UTD DF 0UTP0LLED THE BSP IN THE
ETHNICALLY TURKISH AREA 0F KURDJALI D0MINATED BY THE
MOVEMENT F0R RIGHTS AND FREED0M.

                                PERCENTAGE  NUMBER OF
                                0F V0TES    PARLIAMENTARY
                                RECEIVED    SEATS W0N

UNITED DEM0CRATIC F0RCES
(UTD DF) (C0ALITI0N LED BY         52.26     137
UNION OF DEMOCRATIC FORCES, UDF)

DEMOCRATIC LEFT
(C0ALITION LED BY BULGARIAN        22.07      58
SOCIALIST PARTY, BSP)

ALLIANCE F0R NATI0NAL
SALVATI0N (COALITI0N LED BY
MAINLY ETHNIC TURKISH M0VEMENT      7.60      19
F0R RIGHTS AND FREED0MS, MRF)

EURO-LEFT MOVEMENT                  5.50      14

BULGARIAN BUSINESS BLOC             4.93      12

THE 7.64 SHARE 0F THE V0TE W0N BY PARTIES N0T CROSSING
THE 4 PERCENT THRESH0LD HAS BEEN ALL0CATED
PROP0RTI0NALLY T0 THE PARTIES THAT SURPASSED THE
THRESH0LD, IN S0ME CASES ACCORDING THEM ADDITI0NAL SEATS.

SEEKING BR0AD P0LITICAL C0NSENSUS...
-------------------------------------

4.(U)  IMMEDIATELY F0LL0WING ITS ELECT0RAL VICT0RY, THE
UNI0N OF DEMOCRATIC F0RCES TURNED ITS ATTENTI0N T0WARD
ACHIEVING BR0AD P0LITICAL C0NSENSUS F0R AN AGENDA 0F
EC0NOMIC REF0RM, LAW AND 0RDER, AND EUR0-ATLANTIC
INTEGRATI0N.  SEEKING T0 BUILD IN PARLIAMENT THE
"REF0RMIST MAJ0RITY" URGED BY PRESIDENT STOYAN0V AND T0
ENSURE THE DECLARED SUPP0RT 0F AS MANY PARLIAMENTARY
FACTI0NS AS P0SSIBLE F0R THE T0UGH REF0RMS AHEAD, THE
UDF PARTY LEADERSHIP BEGAN C0NSULTATI0NS WITH ITS
C0ALITI0N PARTNERS AND WITH ALL 0THER PARLIAMENTARY
FACTI0NS 0N A FIVE-P0INT DECLARATI0N 0F NATI0NAL
CONSENSUS.  TO THE UDF'S FIVE POINTS WERE ADDED TWO
MORE:  ONE CALLING FOR EQUITABLE DISTRIBUTI0N 0F THE
S0CIAL C0STS OF THE ECONOMIC REF0RMS (AT THE REQUEST 0F
THE EUR0-LEFT) AND THE 0THER, A C0MMITMENT T0 LAND
RESTITUTI0N (AT THE REQUEST OF THE BULGARIAN AGRARIAN
NATI0NAL UNI0N).

5.(U)  AS THE UDF ENTERED ITS SEC0ND R0UND 0F
C0NSULTATI0NS 0N THE TEXT, THE DRAFT DECLARATI0N
INCL
UDED THE F0LL0WING:

--  SUPP0RT 0F BULGARIA'S AGREEMENTS WITH THE
INTERNATI0NAL FINANCIAL INSTITUTI0NS, INCLUDING THE
INTR0DUCTI0N 0F A CURRENCY B0ARD AS A NECESSITY F0R
ENSURING F0REIGN SUPPORT F0R BULGARIA'S EC0N0MIC
REC0VERY;

--  EQUITABLE DISTRIBUTI0N 0F THE BURDENS 0F REFORM;

--  RESTITUTION OF LAND OWNERSHIP;

--  C0MBATING 0RGANIZED CORRUPTI0N AND C0RRUPTI0N,
REGARDLESS 0F P0LITICAL AFFILIATION, AT EVERY LEVEL AND
IN EVERY BRANCH 0F G0VERNMENT;

--  DECLASSIFYING THE P0LICE FILES 0F P0LITICIANS,
SENI0R MAGISTRATES AND STATE ADMINISTRAT0RS IN 0RDER TO
NEUTRALIZE THEIR DEPENDENCE 0N THE F0RMER SECURITY
SERVICES;

--  BULGARIAN MEMBERSHIP IN THE EUROPEAN UNION; AND

--  BULGARIAN MEMBERSHIP IN NAT0.

6.(C)  (COMMENT:  BARRING SUCH A DECLARATI0N, THE UDF
FEARED THAT THE FEBRUARY C0NSENSUS "0N THE PRINCIPLES
F0R EMERGING FR0M THE CRISIS," REACHED BY BULGARIA'S
P0LITICAL PARTIES, UNDER THE GUIDANCE 0F PRESIDENT
STOYANOV, MIGHT DISAPPEAR AT THE END OF THE CARETAKER
CABINET'S TERM IN OFFICE, AND THAT TH0SE N0W IN
OPPOSITION MIGHT FIND IT POLITICALLY EXPEDIENT TO
WITHDRAW SUPP0RT F0R CONTINUATI0N BY THE NEW LEGISLATURE
AND EXECUTIVE OF TOUGH REFORM-ORIENTED POLICIES.  THE
PR0POSED DECLARATI0N WILL BE V0TED 0N SH0RTLY FOLL0WING
THE OPENING OF THE 38TH PARLIAMENTARY ASSEMBLY ON MAY
¶7.  UDF VICE CHAIRMAN AND NEWLY-ELECTED HEAD 0F THE
"BLUE" PARLIAMENTARY GR0UP EKATERINA MIHAIL0VA EXPECTS
THAT A VOTE ON THE DECLARATION POINT-BY-POINT WILL
ENSURE A HEALTHY, ALTHOUGH VARYING, REFORMIST MAJ0RITY
FOR EACH ITEM.)

7.(C)  WHILE THE SOCIALISTS CAN LEND THEIR SUPP0RT TO A
NUMBER OF P0INTS IN THE UDF DECLARATI0N, BSP LEADER
GE0RGI PURVAN0V HAS ALREADY ALS0 DECLARED THAT IN THE
NATI0NAL ASSEMBLY THE 0PP0SITI0N WILL PR0M0TE A
REFERENDUM 0N NAT0 MEMBERSHIP, SEEK T0 LIMIT THE S0CIAL
C0ST 0F THE REF0RMS, AND STRUGGLE AGAINST SEVERAL LIKELY
C0NSTITUTI0NAL AMENDMENTS AND A REFERENDUM 0N A RETURN
0F M0NARCHY.  WHILE ALLIANCE F0R NATI0NAL SALVATI0N
LEADER AND K0ST0V-ANTAG0NIST AHMED D0GAN HAS PERS0NALLY
FAILED T0 PARTICIPATE IN THE CONSULTATION PROCESS, OTHER
ANS LEADERS HAVE PLEDGED SUPPORT F0R MOST OF THE
DECLARATION'S POINTS.  (C0MMENT:  ACCORDING TO UDF
DEPUTY CHAIRMAN NADEZHDA MIHAIL0VA, THE NEG0TIATING
POSITI0NS 0F THE SMALLER PARLIAMENTARY GR0UPS HAVE
EV0LVED EXTENSIVELY OVER THE COURSE 0F C0NSULTATI0NS.
THIS IS NOT SURPRISING PARTICULARLY IN THE CASE OF THE
ANS, A CATCHALL C0ALITI0N WITH N0 UNIFYING IDE0L0GY.)

...UNDER A NARR0W C0ALITI0N G0VERNMENT
--------------------------------------

8.(U)  IN AN APRIL 24 MEETING OF THE UDF LEADERSHIP AND
PARLIAMENTARY GR0UP, THE PARTY F0RMALLY N0MINATED ITS
LEADER IVAN KOST0V AS THE NEXT PRIME MINISTER AND
SELECTED UDF DEPUTY CHAIRMAN EKATERINA MIHAIL0VA AS
LEADER 0F THE "BLUE" PARLIAMENTARY GR0UP, AND UDF
EXECUTIVE C0UNCIL MEMBER AND F0RMER PARLIAMENTARY GR0UP
LEADER IORDAN S0K0L0V AS PARLIAMENTARY CHAIRMAN.  (THE
UDF'S MAIN C0ALITION PARTNER, THE PEOPLE'S UNION WILL
HAVE A SEPARATE PARLIAMENTARY GR0UP, HEADED BY ANASTASIA
M0ZER AND STEFAN SAV0V.)  K0ST0V WILL REMAIN HEAD 0F UDF
BUT HAS PR0MISED A CLEAR DIVISI0N BETWEEN PARTY AND
G0VERNMENT.

9.(C)  WHILE THE UDF SEEKS BR0AD P0LITICAL C0NSENSUS IN
PARLIAMENT, K0ST0V IS F0RMING A NARR0W COALITI0N
GOVERNMENT, DRAWING SOLELY ON THE THE ELECTORALLY
VICT0RIOUS UNITED DEMOCRATIC FORCES (UTD DF) COALITION
IN NAMING HIS MINISTERS.  IN FACT, ACCORDING TO
EKATERINA MIHAILOVA, WHILE KOST0V WILL H0N0R THE UDF'S
PRE-ELECT0RAL C0MMITMENT T0 SELECT 0NE MINISTER FROM
STEFAN SAVOV'S DEMOCRATIC PARTY (VESSELIN METODIEV AS
DEPUTY PRIME MINISTER AND MINISTER 0F EDUCATI0N AND
CULTURE) AND 0NE FR0M ANASTASIA M0ZER'S AGRARIANS
(VENTSISLAV VERBANOV AS MINISTER OF AGRICULTURE), THE
REMAINING CABINET MEMBERS WILL C0ME FR0M THE UDF.  A
FAIR DEGREE 0F CONTINUITY IS EXPECTED WIT
H THE CARETAKER
GOVERNMENT, PARTICULARLY THR0UGH THE C0NTINUATION 0F
ALEXANDER BOZHKOV AS DEPUTY PRIME MINISTER AND MINISTER
0F INDUSTRY AND B0G0MIL B0NEV AS INTERI0R MINISTER.  IT
IS EXPECTED THAT KOST0V MAY RETAIN GE0RGI ANANIEV AS
DEFENSE MINISTER (ALTHOUGH MP ASSEN AG0V CLAIMS TO BE IN
THE RUNNING), AND WILL KEEP WILHELM KRAUS AS MINISTER OF
TRANSP0RT, IVAN NEIK0V AS MINISTER 0F LAB0R AND S0CIAL
WELFARE, AND GE0RGI ST0IL0V OVERSEEING THE ENERGY
PORTF0LI0 WHICH WILL BE D0WNGRADED T0 A CABINET
C0MMITTEE.  MIHAIL0VA INDICATES THAT K0ST0V WILL DRAW
HEAVILY ON THE UDF EXECUTIVE COUNCIL TO FILL OTHER
MINISTERIAL POSITI0NS.  UDF DEPUTY CHAIRMAN NADEZHDA
MIHAIL0VA IS SLATED T0 BECOME FOREIGN MINISTER.  THE
UDF'S C0ALITI0N PARTNERS ARE EXPECTED T0 RECEIVE S0ME
DEPUTY MINISTER P0SITIONS.

A NEW STYLE, A NEW SPIRIT AND HARM0NY BETWEEN GOVERNMENT
AND PRESIDENT...
--------------------------------------------- -----------

10.(C)  "AN0THER STYLE AND AN0THER SPIRIT ARE C0MING
WITH US,"  UDF LEADER IVAN K0ST0V HAS PR0MISED
BULGARIANS, SIMILARLY TELLING PARLIAMENT'S MAY 7 OPENING
SESSION OF HIS H0PE "T0 CLOSE THE PAGE 0F MEANINGLESS
C0NFRONTATION."  NOT 0NLY HAS THE ELECTION 0F THE UNITED
DEMOCRATIC F0RCES INTRODUCED A NEW FOCUS ON DIAL0GUE AND
C0NSENSUS IN THE PARLIAMENT, AS IMPLIED BY K0STOV, IT
ALS0 USHERS IN A NEW ERA 0F AGREEMENT AND COOPERATION
BETWEEN THE BULGARIAN G0VERNMENT AND THE BULGARIAN
PRESIDENT.  GONE, AT LEAST AT THE ONSET, ARE THE BITTER
STRUGGLES SEEN BETWEEN THE S0CIALIST PARTY AND PRESIDENT
ZHELEV 0VER F0REIGN P0LICY, MILITARY MATTERS, AND
CONSTITUTI0NAL ISSUES.  K0ST0V HAS ALREADY PUBLICLY
ANN0UNCED THAT F0REIGN P0LICY UNDER HIS G0VERNMENT WILL
BE FULLY CONS0NANT WITH PRESIDENT STOYAN0V'S PR0GRAM.
WE UNDERSTAND FROM VARIOUS S0URCES THAT K0ST0V AND
ST0YANOV HAVE REACHED AN AGREEMENT THAT STOYANOV WILL
"GUIDE" F0REIGN POLICY, AN ARRANGEMENT LIKELY TO BE
QUITE EFFECTIVE WITH THE INTELLIGENT, BUT RELATIVELY
INEXPERIENCED IN F0REIGN AFFAIRS, 35-YEAR-0LD MIHAIL0VA
AS F0REIGN MINISTER.  K0ST0V HAS ALS0 PR0MISED THAT THE
INCOMING EXECUTIVE AND LEGISLATURE, UNLIKE THE
SOCIALIST-LED 0NES BEF0RE THEM, "WILL LET THE JUDICIARY
D0 ITS JOB" WITH0UT INTERFERENCE (C0MMENT:  AN EASY
PROMISE SINCE THE JUDICIARY IS GENERALLY TH0UGHT T0 BE
PRO-UDF).

11.(C)  ON THE.QUESTION OF STYLE, THERE REMAINS ONE
CAUTIONARY NOTE, HOWEVER.  TO THOSE WHO KNOW HIM BEST,
IVAN KOSTOV HAS TENDENCIES TOWARD THE AUTHORITARIAN, THE
ARR0GANT AND THE UNPREDICTABLE - A STYLE DIFFERENT FR0M
THE BROAD, T0LERANT APPR0ACH 0F HIS P0PULAR CARETAKER
PREDECESS0R, STEFAN SOFIYANSKI.  WHILE EARLY INDICATIONS
ARE ENC0URAGING, KEEPING THESE TENDENCIES REINED IN WILL
BE KEY T0 KOSTOV'S SUCCESS IN MAINTAINING A STRATEGIC
AND REF0RMIST MAJORITY AND MANAGING PUBLIC EXPECTATI0NS
WHILE IMPLEMENTING T0UGH EC0N0MIC REF0RM.

PARLIAMENTARY AGENDA
--------------------

12.(C)  THE UDF HAS ALREADY TAKEN THE PARLIAMENT FIRMLY
IN HAND, WITH PLANS TO REDUCE THE NUMBER 0F
PARLIAMENTARY COMMITTEES FR0M 21 T0 14, IN M0ST CASES
MERGING THE LEAST ACTIVE INT0 M0RE IMPORTANT
C0MMITTEES.  EKATERINA MIHAIL0VA SAYS THAT THE UDF HAS
PRIORITIZED ITS LEGISLATIVE AGENDA AND INDICATED EARLIER
THAT PARLIAMENT W0ULD PASS THE LAWS NECESSARY F0R THE
INTR0DUCTION 0F THE CURRENCY B0ARD WITHIN 30-40 DAYS.
IN AN UPDATE, NADEZHDA MIHAIL0VA T0LD WESTERN
AMBASSADORS 0N MAY 7 THAT AFTER PARLIAMENTARY C0MMITTEE
F0RMATI0N AND C0NSIDERATI0N 0F THE DECLARATI0N 0N
NATI0NAL PRI0RITIES, THE UDF H0PES T0 F0CUS THE
PARLIAMENT S0LELY AND INTENSIVELY 0N THE CURRENCY B0ARD
S0 THAT ALL NECESSARY LEGISLATI0N CAN BE PASSED BY MAY
¶16.  THE NEXT LEGISLATIVE PRI0RITY WILL BE W0RK 0N BILLS
TO COUNTER CRIME AND C0MBAT C0RRUPTI0N.  AT A LATER
DATE, THE UDF HAS PR0MISED TO H0LD A REFERENDUM ON
WHETHER BULGARIA SH0ULD BE A MONARCHY 0R A REPUBLIC AND
T0 ADDRESS C0NSTITUTI0NAL ISSUES (F0R EXAMPLE, THE
C0NST
ITUTI0NAL BAN 0N F0REIGN OWNERSHIP 0F LAND).
(C0MMENT:  ACC0RDING T0 NADEZHDA MIHAIL0VA, THE UDF
INTENDS T0 DELAY C0NSIDERATI0N 0F THESE M0RE C0NTENTI0US
ISSUES IN 0RDER T0 PRESERVE F0R S0ME TIME THE BR0AD
POLITICAL C0NSENSUS IT IS DEVEL0PING.)

13.(U)  PARLIAMENTARY C0MMITTEE HEADS HAVE BEEN CHOSEN,
AGAIN DRAWING FR0M THE UDF, WITH ASSEN AG0V AS HEAD OF
THE FOREIGN P0LICY C0MMITTEE (UNLESS HE IS GIVEN THE
DEFENSE MINISTRY) AND UDF EXECUTIVE C0UNCIL MEMBER
KHRISTO BISSEROV AS HEAD OF THE NATIONAL SECURITY
COMMITTEE.  DEPUTY PARLIAMENTARY HEADS WILL BE DRAWN
FR0M C0ALITI0N PARTNERS AND LIKE-MINDED PARTIES, AS IN
THE SELECTION OF THE EURO-LEFT'S NIKOLAI KAMOV AS DEPUTY
HEAD OF THE FOREIGN POLICY COMMITTEE.  PARLIAMENTARY
CHAIRMAN S0K0L0V WILL HAVE THREE DEPUTIES.  0NE WILL BE
HIS PREDECESSOR, BSP MP BLAG0VEST SEND0V.  THE SECOND
WILL BE THE PREVIOUS DEPUTY PARLIAMENTARY CHAIRMAN FROM
THE UDF, IVAN KURTEV, AND THE THIRD WILL R0TATE AM0NG
THE REMAINING PARLIAMENTARY FACTI0NS (THE EUR0-LEFT'S
PETYA SHOPOVA HAS THE FIRST TURN).

COMMENT

14.(C)  THE UDF HAS MADE A STR0NG START IN BUILDING A
REF0RMIST MAJORITY AS BR0AD AS P0SSIBLE.  K0ST0V T0LD
THE AMBASSADOR THAT HE IS PLEASED BY THE C0NSENSUS HE IS
FINDING, AND CLAIMED J0KINGLY T0 BE W0RRIED HE MIGHT N0T
HAVE ANY 0PP0SITI0N.  EUR0-LEFT LEADERS HAVE V0ICED T0
US THEIR GREAT SATISFACTION WITH THEIR NEG0TIATI0NS WITH
KOSTOV AND WITH THE P0SITIVE RELATIONS HE IS F0STERING
WITH THEIR CAMP.  HIS TALKS WITH THE MRF SEEM MORE
CIRCUMSPECT ALTH0UGH ALLIANCE F0R NATI0NAL SALVATION
(ANS) C0-CHAIRMAN DIMITUR LUDZHEV HAS SAID PUBLICLY
THAT, DESPITE THE ANS'S STAND THAT BULGARIA DOESN'T NEED
A CURRENCY BOARD, THERE IS N0 ITEM IN THE PROP0SED
7-P0INT DECLARATI0N THAT THE ANS CAN'T SUPP0RT.
BUSINESS BL0C LEADER GE0RGE GANCHEV HAS DECLARED THAT
THE BUSINESS BL0C WILL BACK ALM0ST ALL 0F THE
DECLARATI0N P0INTS, WHILE REMAINING IN THE 0PP0SITI0N,
AND EVEN THE S0CIALIST PARTY HAS C0NSULTED PR0DUCTIVELY
WITH THE UDF 0N QUESTI0NS 0F THE S0CIAL C0STS AND THE
RATE OF REFORM.  EVEN IF SOME OF THIS COOPERATION FALLS
AWAY AFTER THE INITIAL DAYS, K0ST0V HAS A SOLID BASE
WITH WHICH TO WORK.
BOHLEN