By Tsvetelia Tsolova
SOFIA (Reuters) - Bulgaria's outgoing prime minister on Friday criticized the idea of forming a grand coalition to calm anti-government protests, deepening uncertainty over who will lead the European Union's poorest economy.
The mass demonstrations against high electricity prices and low living standards have left Bulgaria facing an early parliamentary election in May in which protest votes could leave the main parties struggling to form a majority.
With many voters disillusioned with years of unmet promises, parties have watered down grandiose claims of what they would do in government, seeking to calm public anger at a political class that is widely viewed as corrupt and self-serving.
"I'd vote for a new party," said Bonka Ruseva, a pensioner in the capital Sofia. "These young people who are protesting are so brave and I believe they can change the situation in the country."
The size of the protests has dwindled since right-wing premier Boiko Borisov said last week he would step down. With parliament set to be dissolved as early as next week, Bulgaria faces a political vacuum.
Large rallies are planned again across the country for Sunday, a national holiday marking liberation from Turkish rule.
Socialist leader Sergei Stanishev, voted out as premier in 2009 as a credit bubble burst and Bulgaria's economy shrank by 5 percent, said he would not serve as prime minister even if his party won the May vote.
He has given no hint of whom he might support, and Borisov appeared to dismiss the idea of a national unity coalition on Friday.
"We are being offered a new form of governance," Borisov said of Stanishev's move, "in which party leaders form some kind of general council, while some puppets play the roles of prime minister and ministers."
Analysts said Borisov's remarks reinforced earlier comments that he would not do a deal with another party. His government had worked without a majority, with backing from independents.
"Borisov is a lone player," said Rumiana Kolarova, a political analyst with Sofia University. "That has made him also the least desired coalition partner."
PROTEST LEADERS MAY FORM PARTY
Borisov, a charismatic former bodyguard and karate black belt, has cut Bulgaria's budget deficit and public debt is one of the lowest in the EU at 15 percent of output.
But his policies, including tax rises and wage and pension freezes, have alienated much of the population.
The new government could find it even harder to meet their demands - tax revenue has fallen, debt payments have grown and Bulgaria is contributing more to the European Union budget.
Those pressures helped send Bulgaria's budget deficit jumping 80 percent in January from a year earlier, according to Finance Ministry figures issued on Friday.
In response to the protests, Borisov's GERB party has proposed to cut electricity prices by 8 percent. The energy regulator on Friday proposed a smaller, 6.4 percent cut.
Borisov's GERB is running neck and neck in polls with its rival Socialists but neither is likely to win a majority.
Potential coalition partners, the ethnic Turkish MRF and Bulgaria for the Citizens - a pro-business group run by former European Commissioner Megleva Kuneva - have avoided saying who they might work with or how they would raise living standards that are less than half the EU average.
Kuneva's party had support of about 5 percent before the protests spread but could benefit as a newcomer to Bulgaria's political scene. She has indicated she would avoid any coalition and support laws on an ad-hoc basis.
This leaves space for protest leaders to form their own grouping and tap the sense of deep discontent with a country still struggling to shrug off decades of communist neglect and misrule, where the average monthly wage is 400s euro and pensions less than half that.
Bulgaria's President Rosen Plevneliev has tried an inclusive approach and met with protesters to hear their grievances.
The protesters have yet to unite behind a single leader or carve out a clear set of demands or policies.
That adds to the sense of limbo which may benefit nationalist parties such as the far-right Attack, adding to the deep uncertainty over the May vote.
"The big question is whether the street will manage to create a new leader. If it can't and the next parliament sees the same old political faces, it will have a very short life," said Andrei Raichev of pollster Gallup International.
(Additional reporting by Angel Krasimirov; Writing by Sam Cage; Editing by Tom Pfeiffer)