Bulgarian lawmakers vote to accept government resignation

             
Bulgarian lawmakers overwhelmingly voted to accept Prime Minister Plamen Oresharski's resignation on Thursday, paving the way for an interim government to take over in August and a snap election to be held in early October.                   

In power for just over a year, Oresharski resigned on Wednesday after a poor showing by his Socialist party in May's European elections. Those results had also led the Socialists' junior coalition partner to withdraw its support.                 

Approval of his resignation was largely a formality after Bulgaria's political parties had agreed to hold early polls. The vote was 180 approving the resignation, eight opposing, and eight abstaining.              

Oresharski leaves his successor to sort out the Balkan state's worst banking crisis since the 1990s, with the fate of its fourth largest lender undecided.             

Corporate Commercial Bank (Corpbank) was hit by a run on deposits in June, forcing the central bank to take control of the lender and shut down its operations. The run then spread to another, bigger lender.                   

With the government gone, it is unclear how Bulgaria plans to rescue Corpbank and to what extent it will protect its depositors and dollar bondholders. Parliament had earlier rejected a proposed rescue package, which would have hived off Corpbank's good assets and liabilities to a subsidiary.               

"The government's resignation has been long awaited and its effects were already calculated by investors," Dimitar Georgiev, trader with Sofia-based Elana brokerage house said.               

"The whole political situation has been calculated already, so there is no impact on stocks today. The market needs two things - a swift, fair and clear solution for Corporate Commercial Bank, which should contain the problem to just this bank and a stable political environment after the October polls."                 

Bulgaria's Sofix index was down 0.2 percent as of 0921 GMT on Thursday, shortly after the vote by lawmakers.               

The blue chip index shot up more than 40 percent in 2013, shrugging of a resignation by a previous government and months of street protests, thanks to its undervalued stocks and a recovering economy.                   

The index has risen more than 9 percent this year, but fell to a year's low on June 27, when the bank run hit First Investment Bank, Bulgaria's third largest lender, a week after Corpbank was taken over by the central bank.                    

The main opposition, center right GERB party is expected to come out on top in the October polls. But it may struggle to get an outright majority, which could prolong the political instability that has gripped Bulgaria for two years. 


REUTERS