A Concise History of Bulgaria

by R. J. Crampton

  Before the elections some party realignment took place. The UDF joined with the smaller right-of-centre PU to form the United Democratic Forces (UtDF), though the UDF remained by far the dominant partner. The leadership of the MRF meanwhile joined with a number of other small parties, including some monarchists, to form the Alliance for National Salvation (ANS); this caused some discontent in party ranks and in the north of the country some MRF local organisations broke ranks and formed electoral alliances with the UtDF. The BSP suffered a number of defections, the defectors forming a new party, the Euro-Left.

  These realignments had little effect upon the outcome of the election. The UtDF secured an absolute majority of 52.36 per cent of the votes and took 137 seats in the sûbranie. The BSP had 22.07 per cent of the votes and 58 seats. The ANS emerged with 19 seats and the Euro-Left 14, whilst 12 seats went to the Bulgarian Business Bloc.

  The Videnov government had transformed the nature of Bulgarian politics, albeit in a fashion it had not intended. Its attempt to restore closer relations with Russia had brought rebuff bordering on humiliation. The widespread belief that the BSP, up to the very highest levels, was closely associated with the conglomerates greatly decreased the party’s moral standing. And the utter failure of its economic policy alienated large sections of the Bulgarian nation. The cumulative effect of these shortcomings, particularly the economic failures, meant that Bulgaria now had no alternative but to seek shelter, safety and salvation within the Euro-Atlantic structures, primarily the EU and NATO. That meant that real reform and restructuring had to begin.

  Part II. Real Transition, 1997–2004

  The Kostov government and the attainment of stability, April 1997–June 2001

  The government of Ivan Kostov achieved a notable record in becoming Bulgaria’s first post-communist administration to run its full constitutional term of four years. Kostov’s period in office also served to strengthen the position of the prime minister against the presidency, thus doing much to ease, if not resolve this major constitutional problem. The Kostov government could claim another notable success when, in December 1999, the Helsinki meeting of the EU agreed that Bulgaria should be included in the list of states with which negotiations for accession would be held. In March 2000 Bulgaria was allowed to begin negotiations on eight of the thirty-one chapters of the acquis communautaire.

  Closer integration into the Euro-Atlantic system was the fundamental aim of the administration. It was never an easy and was frequently a contentious policy. The EU consistently took a tough line, so much so that in March 1999 a frustrated Kostov announced that there was no point setting long-term goals because people were not interested in objectives fifteen or twenty years distant; if membership talks did not start soon, he threatened, Bulgaria would have to postpone the issue indefinitely. Yet there seemed no alternative to the EU and Bulgaria continued to negotiate, whatever the terms dictated in Brussels.

  Progress towards accession depended first upon economic stabilisation, recovery and reform, then upon compliance with other demands made by the EU and NATO, and thirdly upon the containment of crime and corruption at home. It would obviously be aided by EU- and NATO-friendly attitudes in foreign affairs.

  Economic stabilisation was relatively easily and rapidly achieved. True to his pre-election promise, Kostov introduced a currency board in June 1997. The lev was pegged to the Deutschmark – and after 1999 to the euro – and the BNB was forbidden to increase the money supply unless the national reserves had risen by an equivalent amount. The medicine was nasty but effective. Inflation, which in February 1997 alone had been 242.7 per cent, had fallen to 1.7 per cent by July 1999. Bank interest rates moved in the same direction, dropping from the high of 300 per cent in September 1996 to 4.42 per cent in August 1999. Foreign debt also fell, shrinking by almost a billion US dollars in the first quarter of 2000. Financial stability helped wage levels recover from the inflation-hit troughs of 1996 and 1997; the average monthly wage in the public sector in February 1997 had been a mere $25 but by May 1999 it had risen to $124.

  Recovery made renewed reform possible. Prices were once again deregulated, the Videnov government having reimposed central control on the prices of some 52 per cent of goods and services. In January 1999 a second wave of privatisation was launched with thirty-one companies being put on the market and by the end of 2000 seven-tenths of Bulgaria’s enterprises were in private hands. Some privatisations were of large enterprises such as the country’s major oil refinery, Neftochim, which was sold to the Russian LUKoil concern, though the Bulgarian government retained a ‘golden share’ to allow it a veto on decisions which might involve a substantial decrease in production. Another economic advance was the selling off of most loss-making state enterprises. In July 1999 the minister of finance announced that Bulgaria had met the IMF’s deadline for closing or selling forty-one large loss-making enterprises. The massive metallurgical complex at Kremikovtsi outside Sofia was amongst those sold; the price was one dollar. These efforts earned the country plaudits from the international financial institutions. In May 1999 a senior official of the IMF described Bulgaria’s economic behaviour as ‘exemplary’ and good conduct brought more tangible rewards, especially in the form of grants and loans, including $125.5 million from the EU and a general loan of $200 million from the World Bank.

  Other economic reforms were adopted as a result of direct pressure from Brussels, even though they occasioned considerable pain. In 2000 Bulgaria shut down 311 meat-producing concerns and 230 dairy farms because they failed to meet EU standards, and at the same time Bulgaria abolished import duties on 470 agricultural products from the EU. It received little in return. By April 2001 the EU had refused to license any of the remaining 570 meat-producing farms in Bulgaria and had recognised only four of the country’s 280 dairy farms. By March 2004 there were twenty dairies, twelve slaughterhouses, four meat-processing and four fish-product plants with EU export certificates. The restriction of food-processing plants resulted in upward pressures on food prices.

  The demands made by the EU were never confined to the economic sector and other reforms introduced by the Kostov government reflected what Brussels wanted or was assumed to want. In 1998 legislation was introduced providing for state-sponsored programmes in languages other than Bulgarian aimed at ‘Bulgarian citizens whose mother tongue is not Bulgarian’, which made possible the introduction in May 2000 of Turkish-language broadcasting on state radio and television. The government also aimed to impress the EU by founding educational institutions which provided at least some teaching in Turkish. That not as much provision for broadcasting or teaching in Turkish was made available as was expected, or demanded by a number of external agencies, was not entirely the fault of the Bulgarian authorities. There was a lack of trained personnel, both broadcasters and teachers, whilst in the educational sector many Turkish parents, and children too, preferred not to take classes in Turkish if doing so meant, as it frequently did, sacrificing the opportunity to study another foreign language such as English or German. An educational reform more overtly designed to enhance Bulgaria’s prospects in Europe was the introduction in January 2001 of EU-integration courses in high schools. The classes were to provide knowledge of contemporary Europe through lessons in geography, history, economics and philosophy. Subconsciously, perhaps, the educationalists were leading the Bulgarians to European national consciousness as they had led them a century and a half before to consciousness of their own, Bulgarian nationality, and the intelligentsia which a century and half before had led the peasant population to national consciousness was now leading the nation towards European integration.

  Greater transparency in national life was a valid goal in itself but it was also one which would further enhance Bulgaria’s image in the EU. In autumn 1997 police files were made open for inspection and the ministry of the interior for the first time released the names of some politicians and state officials, there were twenty-three of them, who had worked for the communis
t intelligence agencies; a report published in May 2001 revealed that 129 or nearly one in ten of the members of the Bulgarian parliaments since 1990 had worked for the former security services and a number of distinguished non-political figures such as Bulgaria’s first astronaut, Georgi Ivanov, were also named as one-time informers. The revelations embarrassed some politicians but the publication of the names, and the greater access to these sensitive files granted by a law of February 2001, did much to stop the damaging innuendoes which had previously been a prominent feature of Bulgarian public life. The revelations also made much more difficult the unpleasant practice of ‘file blackmail’.

  Another important archival finding, though one resulting from private research rather than government policy, came in January 2001 when an investigative journalist discovered and published material on the regenerative process of the 1980s. This showed that in January 1985 Georgi Atanasov, shortly before he was nominated as Zhivkov’s prime minister, had ordered the assimilation of the Turks in northern Bulgaria. The findings also showed that although there was no direct proof that Zhivkov ordered the assimilationist process or the violent measures which accompanied it, there was clear evidence that he knew of and did not object to those policies.

  If economic reform, the widening of education in minority languages, and greater transparency in national life had been introduced voluntarily because it was believed this would enhance Bulgaria’s chances of progress towards EU accession, there were direct demands from Brussels which were much more difficult to accept and implement. There were three in particular which were to plague both the Kostov government and its successor. The first was the closure of parts of the nuclear power complex at Kozlodui; the second was the reform of the judiciary; and the third was the elimination of corruption.

  The EU considered four of Kozlodui’s six reactors unsafe and demanded that they be closed. As the plant produced at least a third of Bulgaria’s energy and the country had no alternative indigenous source of power this was a tough demand. It was this demand which had sparked Kostov’s rage in March 1999 and he added that the closure of Kozlodui would destroy what little international competitiveness Bulgaria enjoyed. Eventually, however, the Kostov government bowed to Brussels’ demands and in November 1999 agreed to close the two oldest reactors by 2002 and another two by 2006; the EU in return promised $200 million in aid to help alleviate the effects of the closure. The problem of judicial reform was not seriously tackled until after Kostov had left office. The problem was closely linked with that of corruption on which the EU also made rigorous demands which the Kostov government found impossible to fulfil.

  The Kostov cabinet had few difficulties in settling upon foreign policies approved by the Euro-Atlantic communities, though these policies did not always meet with widespread approval at home. Kostov had declared on coming into office that it was his government’s objective to join NATO and parliament had supported him. Even the BSP, once so hostile to NATO, had for some years recognised that there was no alternative security umbrella. It was not surprising, therefore, that the government gave full diplomatic support to the NATO action over Kosovo and allowed NATO planes use of Bulgarian airspace, a privilege it denied to the Russians when they wanted to fly supplies to the troops they had rushed from Bosnia to Prishtina airport in June 1999. Though intensely unpopular at home Bulgaria’s stance over Kosovo was recognised and rewarded in November of the same year by a visit to Sofia by President Clinton, this being the first time that a ruling US head of state had set foot in the country.

  If Bulgaria were to progress towards NATO a compliant foreign policy would have to be complemented by a restructuring of the Bulgarian armed forces which in many respects still bore the imprint of the Warsaw pact. In September 1999, therefore, the government introduced ‘Plan 2004’ to slim down and streamline the military establishment. The link between Balkan instability and the desire for closer relations with NATO was clearly illustrated in the early months of 2001 when it seemed that Macedonia might become destabilised by Albanian insurgents. The Kostov government immediately concluded an agreement allowing NATO to use Bulgarian territory to transit and deploy troops. It was the first government to sign such an agreement and it did so without parliamentary approval, though this was easily and rapidly secured.

  Another development, warmly approved by NATO, was the creation of a Balkan regional peacekeeping force. Meeting in Skopje in September 1998 the defence ministers of Italy, Albania, Bulgaria, Greece, Macedonia, Romania and Turkey agreed to establish a joint three-thousand-strong force whose headquarters were to be in Plovdiv for the first four years and were thereafter to rotate amongst member states. The headquarters were opened in September 1999.

  The fact that NATO will not admit any state which has border disputes with a neighbour no doubt lay behind the agreement of February 1999 concluded between Bulgaria and Macedonia. Both sides denied any territorial claim upon the other and at long last the problem of the language or languages to be used in the text of agreements between the two states was resolved; they were to be ‘the official languages of the two countries’. In effect, Bulgaria had recognised the existence of a Macedonian language without explicitly saying so which meant that around twenty accords, some of which had been pending for years, could be made effective. Thereafter Bulgarian–Macedonian relations were generally friendly.

  Another bilateral Balkan development of significance in the Kostov years was the conclusion of an agreement with Romania on the construction of a second bridge across the Danube. This had been under spasmodic discussion for a decade or more. It was desperately needed. The one existing bridge, between Rusé and Giurgevo, was hopelessly inadequate with lorries frequently having to wait as long as ten days to cross the river. The Romanians had resisted Bulgarian arguments that the bridge should be built in the westernmost parts of the common frontier, the Romanians preferring a more easterly route which would be nearer Bucharest and which, because transit distances in Romania would be greater, would bring more revenue. Two factors changed attitudes in Bucharest. The first was pressure from the EU, which wanted the bridge built as part of its Pan-European Transport Corridor Four, a projected route linking Greece and western Europe via Bulgaria, Romania, and Hungary. The second was the 1999 Kosovo crisis which showed how inadequate communications were once the routes through Yugoslavia were closed. The EU agreed to provide some financial help.

  Plate 9.4 Nadezhda Mihailova, then the minister for foreign affairs, accompanied by her daughter, presents her passport at the border with Greece in April 2001. More importantly, the passport does not have a visa as Bulgaria had secured visa-free entry into the Schengen zone for its citizens.

  During the negotiations with Brussels on accession Bulgaria was generally coupled with Romania, a fact which many Bulgarians resented because they believed that Bulgaria’s reforms were more advanced and effective than those of their larger, northern neighbour. It was a considerable encouragement to Bulgarians, therefore, when, at the end of 2000, it was announced that Bulgarian citizens, though not those of Romania, would be allowed to enter the Schengen area without visas. The agreement was to become effective in April 2001 and meant that Bulgarians wishing to travel to most of the EU were released from the demeaning, time-consuming, and expensive procedures for securing visas.

  By the end of 2000 the Kostov cabinet was in desperate need of good news such as the concession on the Schengen area. The government’s popularity was plummeting and a public opinion poll in February 2001, the beginning of an election year, revealed that support for the UtDF was 30 per cent lower than before the last election in 1997. The reasons for the government’s unpopularity were many.

  In the first place the economic recovery was slowing down just as the painful impact of the new reforms was beginning to be felt on a wide scale. Growth had been a robust 18.9 per cent in the first quarter of 1998 but that had been against the depressed levels of 1997; for 1998 as a whole the rate of growth in GDP was only 3.5 per cen
t and in the first quarter of 1999 it was down to 0.7 per cent. It did not rise greatly from these levels. The trade deficit had also increased mainly because of a decline in exports rather than an increase in imported raw materials. This was in part a result of the Russian economic crisis of 1998 but a much more important contributory factor was the interruption to Bulgarian trade caused by sanctions on Yugoslavia. This intensified the general public’s anger over the government’s support for the NATO campaign. Whatever its causes, the sluggish rate of economic growth discouraged vital inward investment. Inflation, too, was moving in the wrong direction. It had risen to over 6 per cent in 1999 and was to exceed 7 per cent in 2000. This was largely responsible for a worrying fall in the average monthly wage which by November 2000 had fallen back to $110. Early in 2001 the government was further embarrassed by the collapse of the privatised national airline whose planes had to be grounded in the early months of the year.