BALKAN BLOG: Political upheavals force uneasy new alliances

BALKAN BLOG: Political upheavals force uneasy new alliances
CC-DB's Nikolai Denkov (right) will become Bulgaria's next prime minister, followed by Gerb's Mariya Gabriel as the rival parties struck a deal to form a new government.
By Clare Nuttall in Glasgow May 26, 2023

The last 15 years has been a time of upheavals and political changes. One symptom of this is the emergence of new ‘grand coalitions’, where former rivals ally themselves as the least worst option to form a government. 

While grand coalitions typically where the two biggest parties in Parliament from opposing ideologies join to form a government are still relatively rare in Central and Southeast Europe, they are becoming more common, with the most recent just agreed in Bulgaria between former rivals Gerb-SDS and Change Continues-Democratic Bulgaria (CC-DB). 

Similar coalitions were forged in both Latvia and Romania in 2021 though Latvia’s has already fallen apart and Romania’s is in dire straits. 

In all three cases, they brought together former bitter rivals in changing domestic political landscapes, not least as all three countries have seen the rise of far-right parties in the years since the Great Recession. They also faced heavy external pressures: the pandemic for Latvia and Romania; the war in Ukraine for Bulgaria. 

Desperate for partners 

The formation of Bulgaria’s new grand coalition came after more than two years of political instability and no less than five general elections in short succession. 

Most of these elections failed to produce any government at all. The must successful in that it actually produced a regular government was the November 2021 election after which a four-party coalition headed by Change Continues’ Kiril Petkov came to power; however, that collapsed after just a few months. 

The new government will have a rotating prime minister, a position to be held first by CC-DB’s Nikolai Denkov, followed by Gerb’s Mariya Gabriel, as announced at a press conference on May 22. Denkov will be prime minister for nine months, while Gabriel will be his deputy and as well as foreign minister. For the second nine months, Gabriel will take over the prime minister post, while Denkov will become her deputy.

Denkov said that CC-DB will propose a government able to carry out a constitutional reform and a reform of the judiciary. The government will also have the task of fulfilling all requirements for entry to the eurozone and the Schengen border-free area, as well as to file a budget for 2023 with a 3%-of-GDP deficit.

Among the six priorities of the future government are also a return to machine voting, as well as drafting a mechanism to elect members of state regulators where the mandate of the current members has expired. The government should also adopt legislation that would free the country’s security services from foreign influence.

Uneasy partnership

CC-DB had previously refused to participate in coalition with Gerb, while the latter said it would not back a CC-DB government.

This is despite the two alliances having many of the same goals, namely the country’s further integration in the EU with accession to the Schengen area and the eurozone, as well as moving forward the budget for 2023 and reforms that would unlock EU funds under the Recovery and Resilience Facility (RRF). 

Before Russia’s invasion of Ukraine, the two parties had been on opposite side of what was then the main division in Bulgarian politics: between the established parties and the anti-corruption reformers. 

That all changed with the outbreak of war in Ukraine, with the main division now being between pro-Russian and pro-Western parties. That drove a rift between President Rumen Radev and the then government led by Change Continues, which secretly sent arms to Ukraine in the opening days of the war. Suddenly, CC-DB and Gerb found themselves together on the Western side. 

However, CC-DB has been squeamish about allying itself with Gerb following a series of corruption scandals dating back to the party’s 10 years in power. Lurid details of scandals involving Gerb leader and former prime minister Boyko Borissov have been exposed on multiple occasions in the last few years. 

Following the fifth general election in just two years, the two parties faced heavy pressure to do a deal and avert yet another round of unproductive elections. CC-DB in particular was expected to lose support if it failed to do a deal. 

There are also economic consequences of the lengthy political vacuum. Rating agency Fitch noted that prolonged political instability is weighing on Bulgaria's economy as it has slowed EU funds absorption and progress on RRF reforms.

Pandemic pressure 

Romania’s grand coalition was formed before the Ukraine war broke out, amid the fourth wave of the pandemic that hit the country particularly badly due to the low vaccination rate. 

When the coalition between the National Liberal Party (PNL) and reformist Union Save Romania (USR) collapsed, it looked as if the country might have to hold its first snap election in decades. Instead, a new government was formed by the PNL, its main rival the Social Democratic Party (PSD) and the Union of Democratic Hungarians in Romania (UDMR). 

That ensured there was leadership in place at a critical point for the country, when not only did the authorities need to tackle the pandemic, they also needed to ensure EU funds could be used to support the post-crisis recovery. 

Just like in Bulgaria, the deal was that the prime minister position would initially be held by the PNL’s candidate, then halfway through the government’s term it would be handed over to candidate picked by the PSD. However, shortly before that handover is due to take place, the coalition is at breaking point. 

There is currently speculation that Prime Minister Nicolae Ciuca is about to resign, while PSD leader Marcel Ciolacu has suspended talks on a replacement government, saying the ongoing teachers’ strike needs to be addressed first. 

Away from the extremes

Grand coalitions are still relatively rare in Central and Southeast Europe, though in Austria, for example, they have long been a common feature of political life. The mainstream parties from left and right have frequently put aside their differences to join forces and prevent far-left or far-right parties from entering the government. 

Romania is one of the few countries from the region to have previous experience of a grand coalition, back in 2008, when a similar coalition of rivals was formed by the Democratic Liberal Party (PDL) which would merge into the PNL some years later and an alliance between the PSD and the Conservative Party, which ran together in the November 2008 general election. However, that coalition lasted just 10 months, from December 2008 to October 2009. 

More recently, Estonia was also ruled briefly by a grand coalition combining the liberal Reform Party and the populist Centre Party, and led by Reform’s Kaja Kallas, Estonia’s first female prime minister. As in Romania, coalition was formed during a severe wave of the pandemic, after Centre’s initial decision to ally with the radical right-wing Ekre party fell apart. 

Formed in January 2021, the Russian invasion of Ukraine just over a year later spelled the end for the coalition. This boosted Kallas’ popularity, and enabled her to throw Centre out of the coalition in June 2022 – implying the ethnic Russian-backed party was untrustworthy because of its past affiliation with Putin’s United Russia party.

During its 16 months office, the Reform-Centre party coalition had been hampered by increasingly intense disagreements between the partners. Centre, for example, had repeatedly proposed measures, such as increased child support, to help Estonians cope with the country’s cost of living crisis, which the free market Reform party saw as populist ploys to revive the Centre party’s flagging support. It finally fell apart when a bill on preschool education in the Estonian language, approved by the government by consensus, was rejected in parliament by the votes of the Centre Party and EKRE.

Winners and losers 

An alliance with a political rival of different political orientation is a risky step for any party. 

In Estonia, Kallas emerged as the clear winner from the experiment of co-operation with the Reform party, but that was not always the case. Towards the end of 2021, monthly polls repeatedly showed that Centre Party leader Juri Ratas was gaining in popularity, while Kallas had lost ground among her party's voters. 

However, the Reform party’s support grew sharply after the invasion of Ukraine, boosted by Kallas’ strong stance against Russia, while Centre’s support was dragged down by the party’s former close links with Russian President Vladimir Putin’s United Russia Party.

The participants of Romania’s current grand coalition are jostling for position as they try to not to be the one to carry the can for refusing to extend support to teachers around two-thirds of Romanian teachers are currently out on the streets demanding higher pay or for the other political hot potato of pension reform. With both presidential and parliamentary elections approaching in 2024 neither party is keen to tackle the two issues. 

In Bulgaria, the reforms envisaged under the governing programme have the potential to wipe clean Gerb’s current corrupt image. 

The alternative for the party, working with the ethnic-Turk Movement for Rights and Freedoms (DPS) and the Bulgarian Socialist Party (BSP) would likely “hurt Gerb’s popularity ahead of local elections in autumn”, Teneo analysts wrote earlier this month. While theoretically Gerb could have co-operated with the DPS and the BSP, “such a coalition would harm all participants, particularly Gerb and the BSP”, according to Teneo. 

By contrast, the reformers at CC-DB were particularly wary of allying themselves with Gerb in any way, fearing they could be tarnished by the party’s record of past corruption. Even while talks on the new government were ongoing, Bulgaria’s chief prosecutor Ivan Geshev was at a press conference spilling details of incriminating phone and text conversations involving Gerb leader Borissov. 

Their alliance was a mark of desperation; voters were expected to shun parties that didn’t make an effort to form a government. If successful, the coalition could bring both Gerb and CC-DB more votes in the next election. If not, both are likely to suffer in the next round of polls.