* President to hold meeting for election date next week
* South Stream pipeline in focus for Bulgarian leaders
* Government faces no-confidence vote this week
(Adds quote on South Stream, details, party meeting)
By Tsvetelia Tsolova
SOFIA, June 10 Bulgaria should hold an election
as early as next month, the head of the ruling Socialist party
said on Tuesday, saying the instability caused by having a
government on "life support" was bad for the country.
The Socialists have bowed to pressure both from their own
coalition partner and the main opposition GERB party to hold an
early election after their poor performance in last month's
European Parliament poll, gaining less than a fifth of the vote.
Sergei Stanishev's call for a vote in July is earlier than
other parties would like. GERB would prefer an election to be
held at the end of September or early October. The ethnic
Turkish MRF, the Socialists' junior coalition partner, would
prefer November or December.
Whichever date the president negotiates, any new government
will have to take difficult decisions in its dealings with the
EU and Russia over Moscow's proposed building of a gas pipeline
through Bulgarian territory to bypass Ukraine.
"Political instability is the biggest danger. Bulgaria does
not need a government that is on life support," Stanishev said.
"If there is enough political will, early elections in July, by
the end of July, are a possible and realistic option."
Calling an early election would mark the second government
collapse in two years in the European Union's poorest state.
The Balkan state has been hit by political instability and
street protests over corruption and dissatisfaction at the
political elite since last year, and Prime Minister Plamen
Oresharski's minority government has relied on the support of
hardline nationalists to survive a series of confidence votes.
High on any new government's agenda will be the fate of the
Gazprom-led South Stream pipeline project, whose
proposed construction has trapped Bulgaria in an intensifying
standoff between the West and Russia over energy supplies.
Under the threat of punishment from the EU, Bulgaria on
Sunday announced it had suspended work on its portion of the $45
billion pipeline pending a decision on whether it complies with
EU law - prompting criticism from Moscow.
MRF has urged the government not to risk a row with
Brussels. The centre-right GERB has accused the government of
mishandling discussions with the EU over the project and said it
would support it only with Brussels' blessing.
"It is more likely that the project will be delayed,
seriously delayed, given the EU concerns about it," said Daniel
Smilov, a political analyst with Centre for Liberal Strategies.
Due to its fragile public support and coalition infighting,
the government has also been unable to push through a series of
reforms, such as tackling graft, cleaning up the judiciary and
overhauling its inefficient education and healthcare sectors.
Economic growth has also remained sluggish, and foreign
direct investment fell sharply last year.
The decision on the date of the election ultimately rests
with Bulgaria's president, who on Tuesday announced a meeting of
all party leaders next week to agree on a date.
Analysts say that no party is likely to emerge as an
outright winner in the coming election, which could saddle
Bulgaria with another unstable coalition government.
The government is expected to survive a no-confidence vote
due to be held on Thursday.
(Writing by Matthias Williams; Editing by Alison Williams)