UPDATE 2-Bulgarian president calls parliament quickly to end impasse
* President wants government formed fast after divisive vote
* Socialist-led coalition looks most likely
* Other parties refuse to work with biggest group GERB
* GERB seen unlikely to succeed in demand for election rerun
By Tsvetelia Tsolova
SOFIA, May 17 (Reuters) - Bulgarian President Rosen Plevneliev will convene parliament on May 21, in an attempt to have a government formed quickly and end a political impasse in the European Union's poorest country.
Under Bulgarian law, the president must call the assembly within a month of an election. Only then can he ask the largest group - centre-right GERB - to try to form a government.
The election on May 12 produced a deeply divided parliament and all other parties are refusing to work with GERB.
"The biggest challenge now is to restore the trust of the people, which can only happen through a working parliament and government," Plevneliev said on Friday, after talks with leaders of the four parties which will be represented in the assembly.
GERB's government was forced to quit in February after street protests over living standards and corruption, and has been damaged by scandals over wiretapping and illegal ballots.
In a country where a fifth of people live below the poverty line, a new government is needed quickly to address popular anger, negotiate EU funds and draft a budget.
But GERB wants the vote held again because other parties held media conferences the day before the election, when campaigning should have finished.
Legal experts said a ruling on the rerun from the constitutional court may take months, by which time a Socialist-proposed broad alliance would probably be up and running.
"This scenario (cancellation of the election) is very unlikely, but political instability and insecurity in the country will remain," said Desislava Nikolova, analyst at the Sofia-based Institute for Market Economy think-tank.
In the meantime, GERB leader Boiko Borisov said he would try to form a government even though the attempt looks doomed to failure. GERB has 97 seats out of 240 in parliament and must be given the chance to form a coalition before any other party.
"I am not isolated. Over one million Bulgarians who voted for us are in isolation," said Borisov, who has alienated potential allies with his brusque style and what they say is his failure to honour promises in previous agreements.
Other parties said GERB's attempt to form a government and its complaint over the election were spoiling tactics and the actions of a sore loser with no chance of reclaiming power.
If GERB fails, the baton passes to the Socialists, the second biggest party, which wants to form a government led by former finance minister Plamen Oresharski, with support from the ethnic Turkish MRF and nationalist Attack deputies.
The Socialists say this would be a technocrat government with broad backing. Oresharski served under a Socialist government in 2005-2009 but was not a party member.
"Bulgarians want a government that will focus on their real problems, on the misery, lack of jobs and income," said Socialist leader Sergei Stanishev.
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