Thousands rally over economic crisis in Bulgaria

SOFIA, June 16 (Reuters) - Thousands of Bulgarian workers rallied in central Sofia on Tuesday to protest against the Socialist-led government's failure to protect jobs and its credit-fuelled economic boom from the global financial crisis.

Just weeks ahead of a parliamentary election of July 5, between 2,000 and 3,000 teachers, farmers, miners, hauliers and others led by Bulgaria's largest trade union CITUB, gathered in front of the Prime Minister Sergei Stanishev's office.

They waved banners reading "We want our money!" and "Bring back our hopes! We will not stand poverty and humiliation any more".

"The government has done absolutely nothing," electrical engineer Krassimir Kanev said. "We protest for people's prosperity, for replacement of the government, for putting an end to theft."

The European Union newcomer's export-oriented economy is expected to contract by 2 percent this year and thousands are losing their jobs each month.

Discontent is also growing with Sofia's failure to tame chronic corruption and organised crime. Opinion polls and the result of the European Parliament vote on June 7 suggest Bulgarians are set to punish the Socialists in July. [nL8621838]

On Tuesday workers from across the Balkan country urged the government to drop its plan to freeze an initially planned 10 percent rise in public sector salaries as part of spending cuts -- a step that will affect some 400,000 public servants.

In a declaration to the cabinet, they demanded a gradual rise in the minimum monthly salary and a sharp increase in jobless benefits at the expense of cuts in capital and infrastructure expenditure.

They also want the government to pay the interest on mortgages of families worst hit by the crisis for one year.

Struggling with low popularity ratings and public anger over badly handled economic and judiciary reforms, the government has tried to spend its way out of trouble with pension hikes and new building projects.

Economists have warned that the government's pre-election spending spree threatens to create a budget deficit which would force Sofia to seek aid from the International Monetary Fund.