175. Bulgaria and The Development of The Balkans Since 1989

By
Richard Crampton

Since the fall of communist dictator Todor Zhivkov in 1989 Bulgaria has developed a working parliamentary democracy in which personal freedoms are respected and in which open and free discourse are the norm. It has not been as successful in the economic sector.

The country's political life has been dominated by two factors: The Bulgarian Socialist Party (BSP), the reformed Communists, who advocate restraint in economic reform and close relations with Russia, and the Union of Democratic Forces (UDF), which favors a market economy and rapid integration into Western international structures, above all NATO and the EU. The Movement for Rights and Freedoms (MRF) represents mainly the Turkish minority population. Although it once held the balance in parliament, it has lost influence though internal divisions and the emigration of a number of its supporters.

From 1989 to 1992 the UDF was the dominating factor, even though it was in office for only a short time during that period. From the end of 1992 to the end of 1994 Bulgaria had a non-party government of so-called experts, and from January 1995 to early 1997 the BSP was in power. In April 1997 the UDF won an absolute majority. Although both major factions have enjoyed power there has never been a grand coalition between them.

Political change has been achieved within the established political machinery. Elections are fairly conducted and the constitution respected by all parties. There have been occasions when extra-parliamentary forces have made themselves felt. Street demonstrations and strike action precipitated a change of government in November 1990 and in early 1997. There have also been instances when, it is widely believed, the political process was affected by semi-legal or even criminal groups. Under the BSP administration of 1995-97 it was thought that powerful and wealthy business conglomerates were exercising undue influence over ministers and deputies. It was certainly the case that nothing was done in this period to further the economic reform process. That process would have put an end to the subsidizing of loss-making state enterprises from which the conglomerates milked considerable profit; most of these subsidies were then being granted in the form of non-performing bank loans. Despite dire warnings nothing was done to reform the banking system.

Generally, however, the political structure has been successfully reformed. In the economic sector Bulgaria faced greater dangers and difficulties than any other state in Eastern Europe. Before 1989 more than 60 percent of its overseas trade had been with the USSR, which had provided raw materials, cheap fuel, and a dependable market. With the disintegration of the Soviet Union these trading patterns were heavily disrupted. Even worse was the impact of UN-imposed sanctions on Libya, Iraq, and Yugoslavia. Bulgaria had long had links with Libya. In the 1980s it had developed trading relations with Iraq mainly because the Soviets were raising the price of their oil to world levels and Bulgaria was looking for an oil-producer that would barter fuel for exports. By 1990 Iraq was in debt to Bulgaria and was due to send 600 million barrels in payment; all that oil was lost and had to be purchased elsewhere at current prices. The imposition of sanctions on Yugoslavia cut Bulgaria's main trading roots to the vital markets of Central and Western Europe. At the end of 1994 one estimate of the losses caused by sanctions on Yugoslavia alone was $6.1 billion or half Bulgaria's entire external debt. Promises of help to overcome the disadvantages of Bulgaria's obedience to UN demands were rarely made and even more rarely fulfilled. In dealing with its gigantic economic difficulties Bulgaria has suffered more from bad luck than bad management and has not been given sufficient credit, moral or financial, for this.

The one great economic failing for which external factors cannot be held responsible was the weakening of the banking system through incautious loans to loss-making enterprises. The cost of this mistake was paid in 1996 when the banking system collapsed and hyper-inflation swept the country. This was the basic cause of the public anger that burst out in the great crisis of January 1997. It was in many ways a turning point in Bulgaria's post-totalitarian evolution. The crisis was solved by the BSP conceding early elections and agreeing to the setting up of a currency board to stem inflation. What it meant was that the old equation which the party had stressed, that the BSP equaled economic stability, was no longer legitimate. Furthermore, in accepting a currency board the BSP acknowledged that Bulgaria had to look primarily to the West and not to Russia for help. The dividing line between the two main parties was radically redrawn. The currency board also means that budgets must be curtailed. In such an atmosphere the political left cannot flourish; henceforth, the main contest in Bulgarian politics is likely to be between the center and the center-right.

In the Balkan sector Bulgaria has established exceptionally good relations with Turkey and has had few differences with Romania or Greece. Sofia has supported all international efforts to contain the wars of Yugoslav succession and in 1998 was the main proponent of a new initiative for a regional force. This was agreed upon late in 1998 when Turkey, Greece, Romania, Bulgaria, Albania, Macedonia, and Italy established the Balkan multinational peacekeeping force which for its first four years will have its GHQ in Plovdiv.

In February 1999 there was significant progress in settling one of the most difficult of all Bulgaria's Balkan difficulties, that of relations with Macedonia. Bulgaria had been the first country to recognize Macedonia in 1992, but that recognition was of the Macedonian state and not the Macedonian nation. Bulgaria insisted that Macedonian was a dialect of Bulgarian. Bulgarians feared that if they accepted the premise that a separate Macedonian language existed, then extremists in Skopje might claim that part of south-western Bulgaria was Macedonian by language. An agreement signed on February 22, 1999, commits Bulgaria to recognizing that Macedonia has is own official language. In return Macedonia agrees not to apply to Bulgaria a constitutional provision which pledges the Macedonian government to interest itself in the cause of Macedonians living outside the Macedonian state. This obviates any danger of a territorial dispute between Bulgaria and Macedonia and therefore also removes an obstacle to the entry of both countries into NATO.

Dr. Crampton spoke at an EES Noon Discussion on February 18, 1999.

Experts & Staff

  • Christian F. Ostermann // Director, History and Public Policy Program; Global Europe; Cold War International History Project; North Korea Documentation Project; Nuclear Proliferation International History Project
  • Emily R. Buss // Program Assistant