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A month after Bulgaria’s parliamentary elections, former Prime Minister Boiko Borisov was given the mandate to form a new government on November 5. Borisov is still finalising discussion with other parties, and is expected to form a minority cabinet in coalition with the Reformist Bloc.

On November 5, President Rosen Plevneliev gave Borisov’s GERB (Citizens for European Development of Bulgaria), the largest party represented in the new parliament, the mandate to form a government.

If a coalition deal is reached, the parliament is due to vote on the new government on November 7, although on November 5 Borisov pledged to either form his cabinet or return his mandate within 24 hours, website Novinite reported.

The news indicates that Bulgaria is very close to the formation of a new government, and allays fears of a protracted negotiation period or - as a last resort - a new round of elections.

“These are the days of compromise and leadership,”  Plevneliev said on November 5, according to the presidential website. "In the coming hours and days it will become clear whether there is substance in the declarations from political parties [calling] for a new and higher level of stability, a clear recognition of the voice of the people in ... the last election.”

Plevneliev added that representatives of all political parties in the new parliament had said that they did not want another round of elections.

After seven hours of talks late on November 5, GERB, the Reformist Bloc and the Patriotic Front (PF) reached agreement on a joint government programme. A coalition agreement between GERB and the Reformists is expected to be signed on November 6, and both the PF and the Alternative for Bulgarian Revival (ABV) are expected to support the new government.

Together, GERB and the Reformists have 107 of the 240 seats in the parliament, meaning support from the PF's 19 MPs will be needed to get a parliamentary majority.

As Bulgaria nears the formation of a new government, speculation about key positions has intensified. On November 4, daily Dnevnik published its forecasts, writing that it expected three deputy prime ministers, two from GERB and one Reformist, to be appointed in a government headed by Borisov.

Most of the key positions including the finance ministry and interior minister are also expected to go to GERB, although there is speculation that the current caretaker government’s Foreign Minister Daniel Mitov and Justice Minister Hristo Ivanov may keep their posts.

Meanwhile, Dnevnik journalists forecast that the Reformists will get the health, education and defence ministries, and, if it joins the government, the ABV’s Ivaylo Kalfin may become social minister.

The October 5 election were Bulgaria’s second snap elections in under two years. Called after the collapse of a shaky coalition comprising the the former communist BSP and the mainly ethnic Turkish MRF, there were hopes a fresh poll would pave the way for a more stable new government.

However, with many voters turning to small and fringe parties to demonstrate their disillusionment with mainstream politicians, the elections produced a fragmented parliament divided among eight parties, with none holding a majority.

The new government faces numerous challenges, not least reviving the economy and restoring investor confidence. Tim Ash of Standard Bank wrote in a November 4 analyst note that the news is “positive in that Bulgaria might actually have a functioning government at some time in the near future".

“This coalition will be centre-right/reform, which is important given the significant challenges facing Bulgaria in terms of addressing problems in the banks, recent weakness in public finances, weak growth and deeper seated structural problems,” Ash added.

On November 4, the European Commission cut its 2014 growth forecast for Bulgaria from 1.7% to 1.2%. So far in 2014, investment has been driven mainly by public expenditures, which is expected to significantly decrease in the coming years, the EC said. Meanwhile, private investment is seen contracting in 2014-2015. Borisov’s government will also inherit the crisis at the country’s fourth largest bank Corporate Commercial Bank (CCB), after initial attempts to strike a deal with creditors proved unsuccessful.