The Bulgarian winter or protests against corruption, poor living conditions & high energy costs
March 16, 2013
From the beginning of February, Bulgarians in most big cities have been out in the streets, protesting against the increased electricity and heating bills. While the increase has happened gradually throughout 2012, in January 2013 the bills were considerably bigger than they would normally get. The price formation was transparently written down on the bill, but what angered many is that a significant amount of money was charged not for energy per se but for various taxes and tariffs.
Bills and bonds
A wave of contention spread throughout the country, resulting in blockades of roads, barricades, increasing popular rage and police violence. Three men died having set fire to themselves in protest at the bills and the subservience of the state to economic interests. One old man cut his veins out of sheer desperation over his electricity bill. The protesters were mostly rank-and-file Bulgarians: middle-aged men and women, young couples with children and students all went out on the streets to voice their concerns over high energy costs, mediocre living standards and perceived corruption. The protests were also joined and partly hijacked by a number of extreme-right groups, who were ready to exploit the situation for harassment and looting.
The solution offered by many intellectuals, politicians from throughout the political spectrum and the media, was – surprise, surprise – the end of monopolies and further privatization and liberalization of the energy market.
This posture disappointed many, as the whole process is actually a showcase example of how privatized entities function poorly outside state control. The national power distribution companies were privatized in 2005 and then sold out to foreign companies under very favourable conditions. This move made the state – i.e. taxpayers – indebted to the private companies, which held prices high with a cartel agreement.
Yet, it was not the monopoly in general that was a problem: the issue was eclipsed by the amnesia of 23 years of transition to a market economy. It was the monopoly in the hands of uncontrollable private companies within a free market economy with no state regulation or protection that has left the population totally vulnerable to price hikes. The clamour around the energy bills also eclipsed some contradictory actions of the Borisov government. To calm down grain producers who also threatened nation-wide protests, populist Borisov promised new subsidies. Consequently, days before his resignation, Borisov pressed Finance Minister Dyankov to issue government bonds for 800 mio lev (€409 mio). Thanks to the unexpected shock for the national economy, and to the surprise of the international markets, the country’s bond yields started to rise and the value of the Bulgarian debt went down. But it was mostly Bulgarian banks who bought most (over 80%) of the bonds, raising suspicions of a deal to help Borisov’s reelection.
The crisis becomes political
Bills and bonds aside, the crisis of political representation had started. After a few nights of running battles between police and protesters, the government made an attempt to offer some blatantly unsustainable concessions: they offered a significant decrease of energy prices and transparency of the energy sector.
A few “protesters” coming from circles close to the government called for the protests to stop, to little effect. The people demanded Borisov’s resignation. After a night of violent clashes with the police, Borisov filed his resignation, saying he could not tolerate blood on his hands. The resignation was almost unanimously approved by parliament.
President Rossen Plevneliev launched “public consultations” to find a way out of the political crisis and form a new government. In his office, along with representatives of the protesters, he invited neoliberal think-tank experts and members of oligarchic and commercial organizations. The protesters soon walked out. Plevneliev offered the mandate only to the three parties which had previously proposed to form a government: Borisov’s centre-right Citizens for European Development of Bulgaria (GERB), social-democratic Bulgarian Socialist Party (BSP), and the Turkish ethnic Movement for Rights and Freedoms party (DPS) – all refused. This meant the dissolution of the Parliament, the calling of new elections in May and the appointment by the President of an interim “expert” government.
This outcome didn’t satisfy the protesters, who saw it as a convenient way for the current government to gain time to erase their record of corruption and avoid investigation or persecution. And this government shows no intention of reforming electoral laws ahead of the elections, when the current electoral code makes it exceptionally difficult for small parties to run for office.
People did not leave the streets. Demands for the electricity bills to be lowered were soon followed by more radical claims: a new Constitutive Assembly, elections by majority vote with no parties, only individual candidates, and the revision of all privatization deals and concessions of the last 20 years.