Bulgaria president calls May election after protests

Bulgaria's President Rosen Plevneliev speaks during a joint news conference with Prime Minister Boiko Borisov and interior minister Tsvetan Tsvetanov (not pictured) in Sofia February 5, 2013.

SOFIA (Reuters) - Bulgaria will hold an early election on May 12, the president said on Thursday, seeking a way out of a political crisis that could undermine the Balkan country's economic stability.

Prime Minister Boiko Borisov resigned last week after nationwide protests against high electricity prices, and plans to cut prices and revoke the distribution license of Czech utility CEZ could deter other investors.

The European Union's poorest country has kept its debt and deficit low to maintain confidence in a currency peg to the euro, introduced in 1997 after mass protests against hyperinflation toppled a leftist government.

But demonstrations by tens of thousands of Bulgarians have already forced some concessions and whoever wins the election will be under considerable pressure to spend and raise living standards that are less than half the EU average.

"I believe that the necessary key changes in the laws should be decided by a new parliament. The decision is to hold elections," President Rosen Plevneliev told a packed session of parliament.

The average wage is just 400 euros a month and pension less than half that, so electricity prices - although among the EU's lowest - bite particularly deep, particularly in winter when many people use it to heat their homes.

All major Bulgarian parties have said they do not want to form a government in the current parliament.

(Reporting by Sam Cage and Tsvetelia Tsolova; Editing by Alison Williams)