By Tsvetelia Tsolova and Angel Krasimirov
SOFIA (Reuters) - Bulgarian voters fed up with political deadlock may end up with another shaky coalition after a snap election on Sunday, leaving the European Union's poorest member struggling to resolve a banking crisis and revive growth.
Led by a former bodyguard and karate expert, the center right GERB party is expected to win but fall short of a majority, which could spark a period of haggling with smaller parties and the opposition to shore up support.
The new government will be the Balkan country's fifth in under two years, a period that has seen mass street protests topple a previous GERB administration and nearly fell its successor. Any more instability would be a turn off for investors as well as voters, who have seen their country lurch from one crisis to the next. Foreign direct investment has fallen by more than a fifth this year.
Top of the list of the new government's priorities is what to do with Corporate Commercial Bank (Corpbank), Bulgaria's fourth-biggest lender, which was closed after a run on deposits in June and whose fate has been in limbo ever since.
Furious customers at the bank have been unable to access their money for more than three months and the bank's main shareholder is charged with embezzlement. But efforts to sort out the mess were derailed by political squabbles, and there is still no clarity on whether authorities will rescue the bank, and how its depositors and bondholders will be treated.
The Corpbank crisis has fed disillusion with Bulgaria's political class. Seven years after the nation of 7.3 million joined the EU with high hopes of prosperity, corruption remains endemic while one in five Bulgarians lives below the poverty line. The average salary is just over 400 euros ($500) a month.
"I hope that the politicians will finally show some understanding, bury the hatchet and realize that most Bulgarians are struggling," said Petya Marinova, 47, an accountant. "People are really fed up with their dirty games."
Bulgaria has been in the hands of a caretaker government since August, following the collapse of a Socialist-led administration whose year in power was overshadowed by mass protests, deadly floods and a row over Russian energy supplies.
Tucked on the EU's southeastern edge on the Black Sea, Bulgaria left Communism behind 25 years ago, but its loyalties are still divided between old ally Moscow and Brussels.
Heavily dependent on Russian energy, Bulgaria is among the countries most vulnerable to a gas supply cut if the standoff between the West and Russia over Ukraine continues in winter.
Bulgaria's new government will have to walk a diplomatic tightrope over the proposed construction of the giant, Russian-led South Stream gas pipeline, which will bypass Ukraine. Under pressure from the EU and the United States, Sofia reluctantly halted work on the project in June.
Whoever wins on Sunday will also have to persuade parliament to let the government raise new debt to fund a higher fiscal deficit and provide liquidity buffers for the banking system, and plug a large financial hole in the energy sector.
(Writing by Matthias Williams; Editing by Hugh Lawson)