FOLLOWING the June 25 elections that brought seven parties into the National Assembly, employers' organisations in statements on June 30 urged politicians to forget partisanship and form a new government as soon as possible.
"A day lost means a week of problems on our way to the European Union," Union of Employers (UEB) chairman Vassil Vassilev said. If politicians fail to find a solution soon, he said, it would fuel the arguments to those who believe Bulgaria's EU membership should be postponed.
Any delay in forming the next cabinet might activate the safeguard clause of the country's accession treaty, Bulgarian Industrial Association (BIA) chairman Bozhidar Danev said. According to BIA, a government must be appointed within 15 days.
The two organisations, however, differed on the number of parties which should make up the new governing coalition.
UEB called for a two-party model made up of the Bulgarian Socialist Party (BSP)-dominated Coalition for Bulgaria (CB) and the National Movement Simeon II. The most stable coalitions in Europe are made up of two parties, Vassilev said.
BIA said that the government coalition should be made up of three or more parties, though Danev did not comment on which parties should be included.
Danev said that a broad coalition would force the government to abandon anti-business populism.
The government should choose ministers on an individual basis and not consider party affiliation, he said.
The Bulgarian Chamber of Commerce and Industry (BCCI) also backed a multi-party coalition model.
"We are facing a situation for the first time ever when neither of the parties could win a convincing majority in the parliamentary elections," BCCI chairman Bozhidar Bozhinov said in an interview with bTV on July 3. "Each of the politicians playing this game is well aware that each failure will mean a serious personal success for them."
He said that delays could lead to serious economic problems.
Bozhinov also said that the business community had determined pre-election platforms and programmes and so his organisation would expect MPs and the next ministers to respect the business community.
Bulgaria's global debt bonds seemed unaffected by the elections, as investors believed that the next government would maintain current policies.
Most investors were more interested, not in who would form the new government, but on when it would form and if it would be able to make the necessary reforms to join the EU in 2007. Most still believed that Bulgaria was well set to join the EU at that time.
"We think Bulgaria is generally a good story," Nick Eisinger, Fitch Ratings chief analyst for Bulgaria said in London, as quoted by SEE News.
"Accession to EU is likely to continue, (as well as the) very prudent budget policy and the reduction in debt, which should be further facilitated by the early repayment of the outstanding Brady bonds," he said. "All this is a positive news."
There are still areas and issues that Bulgaria needs to address in order to ensure that it joins the EU as scheduled, including the adoption of a new penal code by mid-October, he said
"Even if January 2007 is missed as the joining date...we do not think that will make too much difference," Eisinger said.
He said a one-year delay would raise uncertainty, but in view of the crisis in confidence in the EU after the referendums in France and the Netherlands, it would not necessarily be a disastrous scenario.
Standard & Poor's (S&P) said that it believed Bulgaria's fragmented new parliament would be able to set up a strong government coalition constrained by tight EU reform deadlines.
"The prospects for a ratings upgrade on Bulgaria are undimmed following the elections," the agency said in a statement.
According to S&P's credit analyst Moritz Kraemer, strong cross-party consensus to join the EU by January 2007 would ensure structural reforms, prudent fiscal targets, and adherence to the currency board arrangements that have served Bulgaria well.
Kraemer said that Bulgaria's credit rating would most likely be upgraded within 12 months if the incoming government maintains the EU accession timetable, continues debt reduction, and kept a tight hold on the current account gap.
He warned, however, that a delay in EU entry, which would be possible if Bulgaria failed to make key judicial reforms, or sustained economic volatility would prevent any upgrade.