Bulgaria's PM resigns amid banking crisis

Sofia, 23 July 2014 (MIA) - Bulgaria's Prime Minister Plamen Oresharski stood down on Wednesday, leaving his successor to sort out the Balkan state's worst banking crisis since the 1990s with the fate of its fourth largest lender undecided, Reuters reports.

In power for just over a year, Oresharski's government decided to bow out after the ruling Socialists' poor showing in May's European Parliament elections, paving the way for an interim government to take over in August and a general election in October.

The vote marks the second snap election in less than two years in the European Union's poorest member state. The prolonged instability has hampered efforts to make the economy more efficient and prompted a sovereign credit rating downgrade in June.

The Socialist-led coalition increased the minimum wage, worked to cut red tape for businesses and found investors for a 1.5 billion euro ($2 billion) sovereign bond last month despite the banking crisis.

But Oresharski's tenure was overshadowed by months of street protests against corruption, deadly floods that hit the Black Sea beach resort of Varna in June and a standoff between Brussels and Moscow over a Russian-led gas pipeline project.

The Socialists ruled with the ethnic Turkish MRF party in a minority coalition, which relied on the outside support of the nationalist Attack party to cling to power and survive repeated no confidence votes while in office.

"Today the resignation of the government led by Prime Minister Plamen Oresharski has been submitted to parliament," parliament's spokesman Hristo Kraevski said. The government leaves behind a crisis that erupted in a run on deposits at Corporate Commercial Bank (Corpbank) in June, with no consensus in sight about how to rescue the lender and protect its depositors.

The central bank governor on Tuesday wrote a letter to parliament offering to step down, saying he would not let the bank be used as a political "toy" after repeated attacks on the institution.