By Anna Mudeva and Irina Ivanova
SOFIA (Reuters) - Bulgaria's opposition centre-right GERB party was set to win most seats in Sunday's parliamentary election, increasing the prospect of reforms to combat widespread corruption.
Angry about a painful recession and the government's failure to end a climate of impunity for politicians and crime bosses, Bulgarians punished the ruling Socialists, who looked set to lose around half their seats.
The GERB, led by former bodyguard and now Sofia mayor Boiko Borisov, 50, campaigned on a promise to attack the deep-seated graft that prompted the European Union last year to cut aid pending tougher action on corruption.
Exit polls by Sova Harris and Alpha Research suggested GERB would take 115-117 seats in the 240-strong chamber, compared with 39-42 seats for the ruling Socialists.
If confirmed, the results would give Borisov a shot at forming a government with a grouping of rightist parties, the Blue Coalition, a partnership observers say has the best chance of addressing graft and vital economic reforms. Both groupings have signalled readiness to join forces.
"It is obvious the Socialist-led coalition received catastrophic results," said Kiril Avramov from Political Capital think-tank.
"A centre-right coalition is the most likely option, which will be relatively stable and will have a chance to conduct reforms," he said.
The ex-communist nation of 7.6 million, which joined the European Union in 2007 and is the bloc's poorest member, in 2008 lost access to over half a billion euros ($700 million) in EU aid as punishment for graft.
A new government must move fast to avoid new EU sanctions on aid, badly needed to fund Bulgaria's cash-strapped economy, and to attract investors, many of whom fled this year.
The election came at a crucial time for the economy. After 12 years of growth, Bulgaria is in recession and rising unemployment is ending years of voracious private spending that has fuelled a mountain of debt.
The economy is seen shrinking by two percent in 2009, and like some of its former Soviet bloc peers now in the EU, Bulgaria will likely seek International Monetary Fund aid, analysts say.
BATMAN TO THE RESCUE
The straight-talking, burly Borisov, nicknamed Batman after the fictional superhero due to his zeal for action, has won the hearts of many Bulgarians, tired of two decades of slow reforms.
His party quickly welcomed the results, which topped surveys conducted ahead of the vote by almost 10 percentage points.
"These are good results," Tsvetan Tsvetanov, GERB's chairman told Reuters.
"We will very quickly form a centre-right government but let's first see the final results," he said. He declined to say whether GERB would seek partnership with the Blue Coalition.
The current government took Bulgaria into the EU, lowered taxes and maintained tight fiscal policies. But critics accuse it of incompetence and lacking the will to sever links between politicians, magistrates and crime chiefs.
Underscoring the depth of the problem, prosecutors have launched investigations into widespread allegations of vote-buying by virtually all parties before the ballot, and on Saturday at least five people were arrested.
EU countries have also expressed concern over the participation of several suspected criminals who last month registered to run for parliament to obtain temporary immunity from prosecution and release from custody.