* Early election likely, possibly by late April
* Analysts say vote could produce hung parliament, stalemate
By Michael Winfrey and Tsvetelia Tsolova
SOFIA, Feb 21 Bulgaria's parliament on Thursday
accepted the government's decision to resign in the face of
anti-austerity protests, opening the way for an early election
that may benefit fringe parties and make it hard to form a
Outgoing Prime Minister Boiko Borisov, praised by investors
for cutting the budget deficit, lost support from voters in the
European Union's poorest state over his failure to raise living
standards or stamp out graft.
After mass protests set off by high energy bills, Borisov
stepped down on Wednesday -- the latest administration to fall
in Europe's four-year-old debt crisis.
Parliament voted on Thursday to accept the move and
President Rosen Plevneliev will now ask the three biggest
parties if they want to form a government to rule until a
parliamentary election due in July.
But both Borisov's GERB party and the main opposition
Socialists have said they do not want to participate in a
caretaker cabinet, so Plevneliev could schedule an election for
as early as April. Opinions polls put both parties on about
22-23 percent, suggesting no clear majority in the new
"We are open for dialogue with all parties but GERB, who
ruined everything," said Socialist leader Sergei Stanishev,
whose party was level in polls with Borisov's before the
protests and may have benefited from the unrest.
The cabinet's departure brought some calm after a chaotic
week of rallies against the government and foreign-owned power
utilities and a threat by Bulgarian officials to strip one of
them, Czech power group CEZ, of its licence.
Boriana Dimitrova, an analyst with pollster Alpha Research,
said it could push voters towards the political fringe.
"The two key political powers are not strong enough to form
a stable government," she said. "The recent protests indicate
there is growing support for radical, populist parties, which
will also make it harder to form a cabinet."
CALM, FOR NOW
Borisov, a former guard to Soviet-era dictator Todor
Zhivkov, won adoration from voters by building highways and
improving roads so badly pot-holed that cars could lose wheels
and travel across the small country could take up most of a day.
Around 2,000 Bulgarians waving GERB party flags, including
farmers driving tractors and a truck full of pigs, cheered in
front of parliament in support of Borisov.
"If all possibilities are exhausted...I will form an interim
government, quickly and responsibly," said Plevneliev.
Borisov's administration also impressed foreign portfolio
investors by freezing wages and pensions and cracking down on
the grey economy by digitally linking firms ranging from the
largest factory to the smallest kiosk to the tax office.
But those moves angered many in the Black Sea state of 7.3
million, who are also frustrated at his failure to make good on
his 2009 election pledge to stamp out endemic corruption and
reform inefficient healthcare and education systems.
"Am I pleased with Borisov's resignation? He's just the same
as the ones before. They're all corrupt and they don't care
about people," said Filip Ivanov, a 37-year-old taxi driver.
Borisov's popularity has suffered due to growing frustration
over the slow plod from poverty of a country which has failed to
grow convincingly since recession hit in 2009. Living standards
are about 45 percent of the EU average, the bloc's lowest.
For many here, where wages average about 400 euros a month
and pensions about half that, the final straw was winter power
bills which at times exceeded incomes due to price rises that
began to bite as temperatures fell.
In protests this month, tens of thousands blocked roads and
some clashed with police and attacked offices of power
distributors CEZ, Czech Energo Pro and Austrian EVN
. The utilities say the increase was in line with a
government approved hike in prices last year and said they had
done nothing wrong.
Borisov's threat to strip CEZ of its power distribution
licence has also put Sofia at odds with fellow European Union
member the Czech Republic and raised eyebrows over its adherence
to the bloc's stipulation that its members follow due process.
But Bulgaria's power regulator appeared to soften its stance
slightly on Wednesday, saying CEZ may be able to keep its
license if it reverses violations of the public procurement law.
CEZ shares fell 2.8 percent on Thursday to a four-year low and
Prague urged the European Union to step in.
Before stepping down, Borisov tried to appease voters by
sacking Finance Minister Simeon Djankov, a lightning rod for
criticism for his leading the charge on belt tightening, and
promising a cut in power bills as of March.
For their part, the Socialists have pledged to raise taxes
on the rich and scrap a flat 10 percent income tax rate it
introduced in 2009 They also want to raise the minimum wage,
restart the Russian-backed Belene nuclear power project and to
impose strict control on utilities and fight monopolies.
that has been a draw for foreign investors.