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By Tsvetelia Tsolova
SOFIA (Reuters) - The head of Bulgaria's largest party said on Tuesday he was convinced his rivals would be able to form a government, indicating a political stalemate that could undermine the European Union's poorest economy may soon be broken.
Former Prime Minister Boiko Borisov said that while his GERB party would not back the Socialists' attempts to form a ruling coalition, it would nevertheless lend the next government its support to introduce crucial economic and social measures.
Bulgaria has been at an impasse since an inconclusive May 12 election, making it difficult to address unemployment close to an eight-year high and incomes of less than half the EU average and to avoid protests against low living standards.
Borisov's center-right GERB, which resigned during protests in February, is the largest party in a new parliament but cannot secure backing to control a majority.
The Socialists and their allies, the ethnic Turkish MRF, are one seat short of a majority in the 240-seat assembly.
Borisov said GERB would not support its rivals in the confidence vote they need to win to form a government. But the Socialists and MRF are widely expected to be able to form a government of technocrats with the backing or abstentions of individual lawmakers from GERB or nationalist party Attack.
"I am convinced you will form a government," Borisov told the Socialists at the opening of parliament on Tuesday.
"Those who take up the governance now take a brave and responsible step and should be supported," he said. "You can rely on the support of GERB for the measures that need to be undertaken."
Borisov has often changed tack - insisting he would never resign just days before he stepped down as premier - and his comments are no guarantee that Bulgaria will be able to form a stable government. GERB is still seeking to have the election annulled due to what it called illegal campaigning.
The Socialists say their proposed government of experts would command support from protests groups not represented in parliament. They says their priorities are to create jobs, speed payments to business and increase support for the poorest.
President Rosen Plevneliev will hold consultations with political leaders on Thursday about forming a new government.
As the largest party, GERB will have first chance to form a government, before the Socialists, but has almost no chance of success. Other parties have refused to work with it because of its tarnished reputation after it resigned from government.
After the election of a Socialist speaker on Tuesday, GERB deputies walked out of parliament, blaming Attack for not voting and hence allowing a Socialist in.
If the nationalist party repeated that during voting for a new government, the Socialists and MRF would be able to secure sufficient backing for their administration.
However its leader Volen Siderov told parliament: "Attack will not support any government in this composition of parliament."
Lawmakers for the party, some of whose members wear swastika-emblazoned shirts and make Nazi salutes at rallies, refused to stand when the EU anthem was played at the opening of parliament.
(Additional reporting by Angel Krasimirov; Editing by Pravin Char)