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Back in power, Bulgarian prime minister promises reform

Published 11/07/2014, 07:54 AM
Updated 11/07/2014, 07:54 AM
© Reuters Boiko Borisov, leader of Bulgaria's centre right GERB party, speaks during their first news conference after winning the general elections in Sofia

SOFIA (Reuters) - Bulgaria's new prime minister Boiko Borisov promised an immediate push for reforms to spur economic growth and lure investment on Friday, as his minority coalition government was endorsed by a vote in parliament.

The vote was seen as a formality after Borisov's center-right GERB party, which won a fractured parliamentary election a month ago, managed to cobble together enough support to form a government.

"We know that in order to yield results the reforms need to start immediately and the deadline is today," Borisov told parliament ahead of the vote. "The government will lay the foundations and we will work and I hope we will guarantee a stable development of Bulgaria."

GERB has partnered a group of five tiny pro-market parties and will rely on the support of two other allies, in a deal announced on Thursday that came as welcome news for a country faced with a bank crisis and a weak economy.

Borisov's government will be Bulgaria's fifth in under two years, a period of instability that has stifled any meaningful attempt to implement reforms and root out corruption in one of Europe's poorest countries.

Borisov's previous government was forced to resign after massive protests against high electricity costs in early 2013.

The new government is expected to raise new debt of 4.5 billion levs to finance a fiscal deficit estimated at 4 percent of GDP this year, prop up the banking system and repay depositors of collapsed Corporate Commercial Bank (Corpbank).

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The new government also pledged to restore Brussels' trust in the country, in order to unfreeze blocked EU development funds. It plans to join the bloc's banking union and purge the Bulgarian central bank of its top leadership.

Other policy proposals include imposing a new tax on capital market operations, while keeping the current 10 percent flat income tax rate and carrying out a full review on spending in the energy sector.

The government also plans to propose legal changes to overhaul the inefficient and graft-prone judiciary and police force, to ensure rule of law and crack down on corruption.

(Reporting by Tsvetelia Tsolova and Angel Krasimirov; Editing by Matthias Williams and Catherine Evans)

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