Bulgaria

December 21, 2004
EU Summit Confirms Bulgaria on Track for 2007 Accession
Washington, D.C. - At the December 16-17 European Union summit in Brussels, EU leaders confirmed that Bulgaria had concluded its accession negotiations and would be set to become a member of the bloc in January 2007 if it completed “all necessary reforms and commitments” it had undertaken to align the country’s legislation with EU laws. They also said Bulgaria could look forward to signing its accession treaty in April 2005.

The summit’s presidency conclusions stated that “safeguard clauses” would provide for measures to “address serious problems that may arise before accession or in the three years after accession.” These clauses would allow the EU to temporarily exclude Bulgaria from certain policy areas from 2007 until 2010 if the country implements reforms too slowly.

The conclusions also stated that the EU would continue to closely monitor Bulgaria’s progress in implementing reforms, in particular those concerning judicial reform, border protection, environmental cleanup, the fight against corruption, and ending illegal state aid to industry.

December 17, 2004
U.S. Calls for Further Reforms in Judicial System
Washington, D.C. - Just one week before the December 16-17 EU summit in Brussels, where the bloc’s leaders are expected to name a date for Bulgaria to sign its accession treaty, U.S. Ambassador to Bulgaria James Pardew stated that there was growing concern in Bulgaria and in the international community over “the inability of the Bulgarian legal system to effectively fight organized crime and reduce the level of corruption, especially in the legal system.”

Addressing a December 10 national conference of nearly 1,600 judges in Sofia, Pardew said, “Organized crime leaders flaunt their immunity from the law openly. Their armed convoys with vanity license plates can be seen throughout the country. Brazen acts of violence continue to plague Bulgaria with frightening regularity, as criminal groups battle one another committing murder and mayhem in public.”

Pardew noted that, since he assumed his post in April 2002, over 30 killings linked to organized crime had taken place in Bulgaria, but “not a single significant organized crime leader has been effectively prosecuted for any of these acts.” In addition, he said that Bulgaria had interdicted large amounts of narcotics and counterfeit currency, but there had been no successful prosecutions of major drug bosses or counterfeiters.

The ambassador said the Bulgarian prosecution system was “often used for blatantly political purposes, especially for intimidating the press or others who expose corruption.” He noted that the threat by prosecutors to sue the BBC over a documentary suggesting that the country’s suspended International Olympic Committee member, Ivan Slavkov, was involved in high-level corruption was reminiscent of “the darkest days of oppression during the Cold War” and could damage the country’s international reputation. “When the power of legal prosecution is turned on those who expose corruption rather than on the allegedly corrupt officials themselves, the judicial system is turned upside down,” Pardew said.

The ambassador noted that these factors “hinder investment, block economic development, stifle individual initiative, corrupt or drive away young people, and cost the state millions in lost revenues.” The Bulgarian people “want a fully functioning democracy, and they deserve a legal system that engenders trust rather than fear,” he stated.

Although the European Union closed accession talks with Bulgaria in June 2004 and has scheduled the country’s entry into the bloc for early 2007, it has warned the Bulgarian government that it still has to thoroughly reform the country’s justice and law-enforcement system, while EU monitors have been particularly critical of the system’s pre-trial investigations, which prosecutors oversee.

While Rosen Dimov, the head of an association of Bulgarian prosecutors called Pardew’s remarks “extremely dishonest,” Bulgarian Minister of European Affairs Meglena Kuneva said she had consistently been urging the government to enact further reforms in the legal system. Dimov maintained that, in many cases, the police and the service that handled preliminary investigations were responsible for shortcomings in the system and that legislators had been trying to reduce the power of prosecutors over the past few years.

November 5, 2004
Sofia to Reduce Troop Strength in Iraq
Washington, D.C. - The Bulgarian Defense Ministry said it would reduce its military contingent in Iraq by 10 percent beginning in December, due to what it foresaw as a reduction in its duties following the current transfer of the troops from Karbala to Diwaniyah, near Najaf. The contingent is to be downsized from 480 to 430 troops.

Ministry spokesman Vladislav Prelezov stated that U.S. and Polish military experts had said 430 troops would be adequate to carry out the military tasks in the new location. The Bulgarian troops will remain part of a Polish-led multinational division, which they joined in May 2003. Seven Bulgarian soldiers have been killed in Iraq.

October 8, 2004
Sofia on Track for 2007 Membership in EU
Washington, D.C. - The European Commission, in a report released on October 6, stated that Bulgaria would be ready to join the European Union on January 1, 2007, if it implemented key reforms already agreed upon.
Bulgaria has achieved “a reasonable degree of alignment” with the acquis communautaire, the body of EU laws, in “the large majority of areas,” the report said. It also noted areas of concern that required additional attention, including the necessity for improvement in the country’s capacity to prosecute those involved in organized crime and corruption through further reforms in the structures of the judiciary and police, as well as the targeting of high-level corruption.

In addition, the Commission said, further progress should be made in implementing laws on human rights and fundamental freedoms, including those that address trafficking in human beings, which remains “a serious problem.” The legal framework regarding libel and defamation by journalists also needs to be revised, it stated. Although efforts have been made to develop a framework to tackle problems faced by minorities, “the situation on the ground has not evolved much,” the Commission said, noting, in particular, the need to combat anti-Roma prejudice. Effective implementation of legislation needs to be undertaken in the areas of labor law, occupational safety and health, public health, anti-discrimination, and equal opportunities for women and men. The Commission also called for the continued reinforcement of the judicial system and administrative structures in certain sectors.

The Commission proposed a “safeguard” that would allow it to recommend that the European Council postpone Bulgaria’s entry into the EU by one year “if there is clear evidence that there is a serious risk” that the country will not be prepared to meet the requirements of membership by the beginning of 2007. It said the signing of an accession treaty by Bulgaria, which concluded its membership negotiations in June 2004, was likely to take place in early 2005.
In 2003, the Commission declared that Bulgaria had a functioning market economy, a key EU benchmark. The Commission’s October report will be endorsed by EU leaders at their summit in December.

October 1, 2004
Troops to Remain, Relocate in Iraq
Washington, D.C. - Bulgarian Defense Minister Nikolai Svinarov announced that Bulgaria had agreed to relocate its 480-member military contingent deployed in the city of Karbala to the town of Diwaniyah, east of Najaf, by the end of December. The Bulgarian troops will remain part of the Polish-led, 6,000-member multinational division, which is preparing to take over control of the area around Diwaniyah.

Svinarov said it would take about three weeks for the contingent to prepare for the move to Diwaniyah, where the troops would be housed at a base formerly used by Spanish troops before they withdrew from Iraq earlier this year.

October 1, 2004
Assistance to Tirana and Skopje for NATO Membership Preparation
Washington, D.C. - At the initiative of the Bulgarian government, the defense ministers and military chiefs of staff of Bulgaria, Albania, and F.Y.R. Macedonia met in Sofia for the first time to launch a series of steps that will enable Sofia to help Tirana and Skopje prepare for NATO membership in areas such as military reform.

Bulgaria became a NATO member in March 2004, and Albania and F.Y.R. Macedonia belong to the alliance’’s Partnership for Peace program.
At the Sofia meeting, the three countries agreed to establish a joint air defense system and discussed possible cooperation among their intelligence services as a way to boost regional security. The chief of staff of the Bulgarian Army, Gen. Nikola Kolev, said no deadline had been set for the completion of the air defense system.

September 24, 2004
Relocation of Bulgarian Troops Within Iraq
Washington, D.C. - Maj. Gen. Andrzej Ekiert, the commander of the Polish-led, 6,000-member multinational division in south central Iraq, said that Poland was preparing to take over control of the area around Najaf and the 480 Bulgarian troops serving in Karbala under Polish command would have to move to the area as well. The Polish commander said control of Karbala would be transferred to U.S. forces.

Bulgarian Defense Minister Nikolai Svinarov and Polish Defense Minister Jerzy Szmajdzinski and the chiefs of staff of the two countries held consultations over the matter. Svinarov stated that Bulgaria had been asked to relocate its troops to Diwaniyah, just east of Najaf, and had been sent all the technical parameters for the relocation.

In Najaf, a militia loyal to Shiite cleric Muqtada al-Sadr has been battling U.S. soldiers. Although five Bulgarian soldiers were killed and 26 were injured in a suicide attack on their base in Karbala in December and a sixth soldier was killed while on patrol in the city, Karbala has been relatively quiet in comparison to the Najaf region.

Bulgarian President Georgi Purvanov said he had serious reservations about transferring Bulgarian troops to the area around Najaf, where, he said, “residents could be hostile to our soldiers.”

August 27, 2004
EU Report Calls on Bulgaria to Step Up Fight Against Crime
Washington, D.C. - A report commissioned by the European Union urged Bulgarian authorities to take immediate action to develop more effective structures to combat organized crime.

The report concluded that Bulgaria “constitutes the weakest point in the fight against organized crime in the Balkans” and lacks the equipment, infrastructure, and legislation required to eliminate mafia-style criminality. The illegal trade in drugs and human trafficking underlying this criminality were of concern to EU member states, the report said.

The document, drawn up by EU-appointed British expert Byron Davies, stated that the country’s police are plagued by cronyism, while there is poor coordination between police and investigators and no centralized process for gathering and disseminating intelligence data. “The presence of armed, organized criminals on the streets of Sofia is very evident,” the report stated, citing what it characterized as a lax attitude on the part of authorities toward these figures, who have engaged in gangland-style shootings that have killed 30 people since early 2003.

In June, Bulgaria completed negotiations with the European Union for accession to the bloc and is expected to become an EU member on January 1, 2007. An overall report concerning the country’s compliance with obligations it undertook during these negotiations is expected in November.

While Bulgaria’s Minister of Interior, Georgi Petkanov, rejected the conclusions of the report asserting that they were based on “outdated figures,” the country’s Minister of European Affairs, Meglena Kuneva, called on the government to heed the observations in the report, noting that the country’s failure to effectively contain its crime problem could delay its entry into the EU by a year. The Secretary General of the Interior Ministry, Boiko Borissov, said “a large part of the [report’s] findings are accurate,” but he said plans had been laid for the passage of legislation this fall to make the police and courts function more efficiently.

Scotland Yard experts were expected to arrive in Bulgaria to review the report. British experts are already assisting Bulgaria in the implementation of an anti-corruption project that will extend through mid-2005.

As part of stepped-up protection against terrorism, Minister Petkanov has ordered the dispatch of 400 additional policemen to guard key sights in Sofia and other Bulgarian cities, such as airports, railway stations, harbors, embassies, state administration offices, and the country’s nuclear power plant.

August 13, 2004
Second Bulgarian Hostage in Iraq Confirmed Dead
Washington, D.C. - The Bulgarian Foreign Ministry, on August 11, confirmed that a body found in Iraq was that of civilian Bulgarian truck driver Ivaylo Kepov. Kepov was taken hostage in late June in Mosul along with fellow Bulgarian driver Georgi Lazov by the Al-Tahid and Jihad Group, believed to be led by Jordanian militant Abu Musab al-Zarqawi. Lazov was killed July 8 by the group.

August 6, 2004
U.S. Discusses Possibility of Base in Bulgaria
Washington, D.C. - On a visit to Bulgaria that included discussions on the possible basing of U.S. forces in the country, Gen. Richard Meyers, the chairman of the U.S. Joint Chiefs of Staff, described Bulgaria as “a committed and valued partner of the United States and a stabilizing force” in the Balkans, Iraq, and Afghanistan. The people of Bulgaria and the country’s leadership, he stated, have the “resolve” to work toward defeating terrorism.

Bulgaria, which has deployed about 480 troops in the Iraqi city of Karbala under Polish command, will train some 20 Iraqi police officers at the police academy in Sofia under a $114,000 program. Bulgaria also has 65 troops in Afghanistan, 198 in Bosnia, and 42 in Kosovo.

Gen. Meyers stated that he and the Bulgarian Chief of the General Staff, Gen. Nikola Kolev, had conducted “pretty extensive discussions on potential [U.S.] military basing” in Bulgaria, noting that the “U.S.-Bulgarian security relationship” was “very strong.” He added that the United States was “discussing its military posture around the world with many countries” through ongoing consultations, and any decisions concerning the basing issue were “a long way off.” In 2003, Bulgaria’s parliament expressed support for the establishment of U.S. bases in the country.

On July 26, the U.S. and Bulgarian militaries began a joint exercise, “Bulwark 2004,” at the Novo Selo military base near the Bulgarian town of Sliven. The exercise, which will end on August 22, involves the participation of 900 American troops and some 200 Bulgarian forces. The maneuver is the largest joint exercise conducted by the two countries since Bulgaria became a member of NATO in March 2004. It involves live-fire combat scenarios, including NATO small-unit tactics.

Gen. Meyers said the United States was providing assistance and equipment to the Bulgarian forces in Iraq, while also consulting with the Bulgarian Ministry of Defense concerning the reform of the Bulgarian military. Members of the Bulgarian military, he stated, are trained in the United States through the International Military Education and Training (IMET) program.

July 23, 2004
Bulgaria Calls for Unified Conduct Against Hostage Takers
Washington, D.C. - Bulgarian Foreign Minister Solomon Passy, during discussions with officials in Washington in his capacity as both the current chairman-in-office of the OSCE and foreign minister, called for a unified “code of conduct” among countries whose military or civilian personnel are taken hostage in Iraq.

The code would stipulate that countries victimized by hostage incidents should agree not to negotiate with the abductors or change their policies in Iraq by withdrawing troops. Passy has presented his proposal to the U.N. Security Council and the North Atlantic Council.

Passy stated that, when two Bulgarian civilian truck drivers were abducted in Iraq on July 8 by the Al-Tahid and Jihad Group, believed to be led by Jordanian militant Abu Musab al-Zarqawi, all Bulgarian institutions were united in their position that Sofia was not going to negotiate with the terrorists or alter its policy in Iraq, where 485 Bulgarian troops are deployed. He said this had been made clear through a July 14 joint statement by Bulgaria’s prime minister, president, and speaker of parliament, as well as a statement by the full parliament. One of the truck drivers has been killed, while the fate of the other driver is unknown. Six Bulgarian soldiers have also been killed in Iraq.

Secretary of State Colin Powell called Bulgaria’s reaction to the actions of the hostage takers “an example to all of the nations of the world, and especially the nations within the coalition” in Iraq, that kidnapping “cannot be found acceptable and cannot be negotiated with, and when you negotiate . . . all you do is encourage it.” Powell said he and Passy had discussed whether coalition forces in Iraq, or perhaps NATO or the United Nations, “should speak out clearly on this subject, because it affects not just what is happening in Iraq, it affects the entire civilized world.”

The foreign minister said the Bulgarian government had invited the United States to establish a military presence in Bulgaria, a matter that was discussed in meetings with National Security Advisor Condoleezza Rice, Powell, and other officials at the Department of State including Undersecretary of State for Political Affairs Marc Grossman and Assistant Secretary of State for Near Eastern Affairs William Burns. Passy said Bulgaria was waiting for a decision by the U.S. government on the issue, noting that both the Bulgarian parliament and the people of Bulgaria supported the basing of U.S. forces in the country.

Passy also met with Vice President Richard Cheney; Senator Richard Lugar (R-Indiana), chairman of the Senate Foreign Relations Committee; Representative Ben Nighthorse Campbell (R-Colorado), who is co-chairman of the U.S. Helsinki Commission, and other members of the House of Representatives; and Representative Alcee Hastings (D-Florida), who was elected the president of the OSCE Parliamentary Assembly in early July.

July 16, 2004
Bulgarian Hostage Killed in Iraq
Washington, D.C. - The Bulgarian government stated that it would keep its 485 troops in Iraq, despite the beheading of one of two Bulgarian civilian truck drivers taken hostage near Mosul on July 8 by the Al-Tahid and Jihad Group.
A joint statement released by President Georgi Parvanov and Prime Minister Simeon Saxe-Coburg Gotha said, “We feel that Bulgaria must continue to contribute to reconstruction, stabilization, and democratic development in Iraq, in conformity with its international obligations resulting from U.N. resolutions.”

The Al-Tahid and Jihad Group, believed to be led by Jordanian militant Abu Musab al-Zarqawi, threatened to kill both of the men unless U.S. forces released the Iraqi prisoners they are holding. Parvanov said the demands of the militants were “unacceptable for Bulgaria.”

July 10, 2004
IMF Assistance Leading Up to EU Accession in 2007
Washington, D.C. - Bulgaria and an IMF delegation have agreed to sign a two-year, stand-by, precautionary agreement that will allow Sofia to draw up to $140 million in IMF funds, if the country is in need of money to protect its balance of payments.

The agreement, which is expected to be approved by the IMF’s executive board on August 6, will expire upon Bulgaria’s entry into the European Union, scheduled for January 2007. The Bulgarian government will be obligated to move ahead with economic austerity measures imposed by the IMF in exchange for the agreement. The international lending organization is concerned about Bulgaria’s growing current account deficit, which is $1.8 billion, or 8.7 percent of the country’s GDP. In addition, its foreign debt accounts for 60 percent of the GDP.

Bulgaria has signed eight stand-by agreements with the IMF since 1989. The latest, worth $300 million, went into effect in 2002 and expired in February 2004.

Sofia concluded the negotiation process for EU membership on June 15. The presidency conclusions of the June 17-18 EU summit in Ireland stated that the drafting of the accession treaty for Bulgaria would begin in July 2004, with a view to achieving signature of the treaty as early as possible in 2005.

In the presidency conclusions, the EU also urged Bulgaria to further intensify its reform efforts in order to be ready for membership in 2007, particularly with regard to improving its administrative and judiciary capacity, continuing economic and structural reforms, and fully implementing commitments that have been negotiated.

July 10, 2004
Bulgaria Supports Turkey’s EU Bid, Closer Bilateral Economic Relations
Washington, D.C. - During Turkish Prime Minister Recep Tayyip Erdogan’s July 6-7 visit to Sofia, Prime Minister Simeon Saxe-Coburg Gotha said Bulgaria supported Turkey’s entry into the EU and hoped that its accession talks with the bloc would begin soon.

Erdogan also met with Ahmed Dogan, the leader of the Movement for Rights and Freedoms, a party formed primarily from the country’s ethnic Turkish minority, to discuss the challenges Bulgaria faces following its entry into NATO this spring and in preparation for EU membership in 2007. The party is part of Bulgaria’s governing coalition and holds two ministerial posts. The Turkish minority comprises about 10 percent of Bulgaria’s population of 8 million.

While in Sofia, Erdogan also met with European Parliament President Pat Cox, who said Turkey had achieved “unbelievable” reforms in preparation for EU membership. Cox stated that he believed these reforms, as well as Turkey’s positive stance concerning the reunification of Cyprus, would be taken into consideration during the December EU summit, where a decision will be made on whether to begin accession talks with Turkey. Erdogan said a failure to be granted a date in December for talks would “deeply distress” the Turkish people.

The Turkish prime minister, who was accompanied to Sofia by nearly 100 Turkish business representatives, met with Bulgarian officials to discuss ways to boost bilateral trade and economic relations. Bulgaria has become Turkey’s fifth-largest trading partner. The two countries’ bilateral trade volume was $1.3 billion at the end of 2003, while Turkish investments in Bulgaria have reached $300 million. Erdogan stated that Turkish investors had a larger presence in Bulgaria than they did in any other country, involving over 2,500 firms.

The establishment of the Turkish Chamber of Commerce and Industry in Bulgaria, to further the development of Turkish-Bulgarian economic relations, was announced during Erdogan’s visit. There are four associations of Turkish businessmen in Bulgaria, which will be invited to join the Chamber.

In addition to attending a meeting of the Turkish-Bulgarian Businessmen’s Association, Erdogan and Saxe-Coburg Gotha broke ground for a $160 million glass plant to be built by a Turkish company, Sisecam, in the Bulgarian town of Targovishte, about 200 miles northeast of Sofia. The plant will create 700 jobs in the area, where many of the country’s ethnic Turks live.

June 4, 2004
Former Prime Minister Kostov Establishes New Party
Washington, D.C. - Former prime minister Ivan Kostov, who served as head of government from 1997 until his center-right Union of Democratic Forces (UDF) was defeated in June 2001 by the newly formed center-right party of the former king of Bulgaria, Simeon Saxe Coburg-Gotha, has formed a new party, Democrats for a Strong Bulgaria.

Kostov and his followers said they would work toward challenging the prime minister’s National Movement for Simeon II (NMS) in the June 2005 parliamentary elections. The results of the October 2003 local elections, in which the NMS garnered only 10 percent of the vote compared to the 42.7 percent it received in 2001, were viewed as a sign of diminishing support for the ruling party.

In the 2001 elections, the UDF came in second with 18.2 percent of the vote. Kostov resigned from his position as leader of the UDF, taking responsibility for the party’s heavy electoral defeat. He remained a member of the party until February 2004, when the UDF split into two groups. Those loyal to Kostov have become members of the new party. Its 28 parliamentarians represent the third-largest grouping in parliament after the prime minister’s party, with its 97 lawmakers, and the Coalition for Bulgaria, led by the Bulgarian Socialist Party, with 48.

Saxe Coburg-Gotha’s coalition government is comprised of his party; the Movement for Rights and Freedoms, a party formed primarily from the ethnic Turk minority, which received 7.4 percent of the vote in 2001; and one minister originally from the Bulgarian Socialist Party, who is considered an independent.

April 30, 2004
Sofia Calls for Greater U.N., NATO Role in Iraq
Washington, D.C. - Bulgarian President Georgi Parvanov called for a “rapid and efficient U.N. engagement” in Iraq, where 480 Bulgarian troops are serving under Polish command in the city of Karbala.

Parvanov said his country’s troops would remain in Iraq, despite the tense situation there, and Sofia might consider increasing the number if the U.N. passed a resolution supporting the peacekeeping force.

The mission in Iraq, he said, would take on a different character if it operated under the auspices of the United Nations, “with soldiers taken from elsewhere, for example from Arab countries, because at the moment the extremists are turning this into a clash of religions.”

Over the last month, the Bulgarian troops have been repeatedly attacked by Iraqi insurgents, resulting in the death of one soldier on April 23, bringing the total number of Bulgarians killed in Iraq to six.

Parvanov said his country’s troops were not prepared for the kind of fighting they are doing in Iraq and need “immediate and substantial military backup” from the coalition. During his April 25 unannounced visit to Iraq to meet with the troops, the president’s motorcade was fired upon, but no one was injured in the attack.

The issue of U.N. involvement in Iraq was discussed in a meeting between Parvanov and Polish President Aleksandr Kwasniewski in Warsaw on the sidelines of the European Economic Summit. The two officials stated that, in addition to a greater U.N. role, they favored a stronger NATO commitment in Iraq.

In his talks with Kwasniewski, Parvanov repeated his demand that the Bulgarian troops be transferred from Karbala to a camp on the outskirts of the city, where Polish forces are stationed, by June 30, when administrative power is handed over to Iraqi authorities.

Bulgaria joined NATO in March.

April 16, 2004
Bulgarian Military Force to Stay in Iraq Despite Escalating Violence
Washington, D.C. - Following a week of fighting between Bulgarian troops and Shiite insurgents in the Iraqi city of Karbala, where 480 Bulgarians are based as part of a 9,000-strong multilateral force under Polish command, President Georgi Parvanov on April 13 asked the parliament to amend its mandate for the mission to indicate that it can no longer be characterized as “peacekeeping” due to the contingent’s participation in combat operations. One civilian Bulgarian truck driver was killed and four Bulgarian soldiers were injured during the fighting.

Though the president stated that Sofia had no plans to pull its troops out of Iraq, he called on the parliament to sanction the reinforcement of the Bulgarian force and the possible relocation of the Bulgarian base outside of Karbala. Foreign Minister Solomon Passy stated that the U.S. had sent 120 soldiers to Karbala to help the Bulgarians deal with the conflict in the city.

Although five Bulgarian soldiers were killed in Iraq in December 2003, opinion polls continue to indicate that the majority of Bulgarians support the country’s participation in the Iraq operation.

On April 14, Bulgaria’s First Deputy Chief of the General Staff, Vice Admiral Petar Petrov, held talks in Washington with General Peter Pace, the vice chairman of the Joint Chiefs of Staff, on bilateral issues. They included U.S. assistance in the ongoing reform of the military of Bulgaria, as a new NATO member; the procurement of new U.S. armaments; Bulgaria’s new strategic review of the structure of its military to ensure that it complies with alliance standards; and U.S.-Bulgarian relations in the context of NATO’s role in the Black Sea and Caucasus region.

The U.S. Embassy in Sofia announced that some 1,100 U.S. and Bulgarian soldiers would hold their first joint military exercise, codenamed “Bulwark ‘04,” over a three-week period in July and August in eastern Bulgaria. The purpose of the maneuver will be to practice combat techniques used by NATO, the embassy stated.

Finance Minister Milen Velchev said that Bulgaria, whose NATO membership became official in late March, will cover a total of 0.4 percent of NATO’s military budget, while 2.6 percent of Bulgaria’s GDP will be allocated for the modernization of the Bulgarian Army.

April 2, 2004
Bulgaria Becomes NATO Member
Washington, D.C. - President Bush welcomed Bulgaria into NATO at a White House ceremony on March 29, along with Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia. During the event, attended by Bulgarian Prime Minister Simeon Saxe-Coburg Gotha and the prime ministers of the other six countries, as well as NATO Secretary General Jaap de Hoop Scheffer, the president emphasized the alliance’s transformation into a partnership aimed increasingly at fighting terrorism in Europe and beyond the continent’s borders.

Prior to the White House event, the seven nations formally became members of the alliance by depositing their instruments of accession with the United States, which is the depository.

January 30, 2004
Allegations of Iraqi Oil Bribes to Be Investigated
Washington, D.C. - Bulgarian President Georgi Parvanov ordered the country's intelligence and national security services to investigate allegations that the Bulgarian Socialist Party (BSP), which governed from January 1995 to February 1997, accepted bribes in the form of oil in 1998 from Saddam Hussein in exchange for political support for his regime. Parvanov was the leader of the BSP from 1998 to 2001.

The allegations surfaced in Iraqi media reports citing sources at Iraq's Oil Ministry who claimed that the BSP was included on a list of 270 companies, organizations, and individuals in 50 countries, including Yugoslavia, who were recipients of the oil. The reports said the BSP, the former Bulgarian Communist Party, was given 12 million barrels of oil by Hussein "as a gift." IraqBulOil, a private company based in Plovdiv, Bulgaria, was also on the list.

Bulgaria is currently governed by a coalition consisting of the Simeon II National Movement, a party created by Bulgarian Prime Minister Simeon Saxe-Coburg Gotha; the Movement for Rights and Freedoms, formed mainly from the ethnic Turkish minority; and one independent minister, who is a former member of the BSP.

The country's rightist Union of Democratic Forces called for the establishment of a special parliamentary committee to look into the allegations.

January 9, 2004
Five Bulgarian Peacekeepers Killed in Iraq
Washington, D.C. - Five of the 485 Bulgarian soldiers deployed in Iraq died in late December as a result of injuries sustained in a series of bomb attacks in Karbala, where the Bulgarian contingent has been serving as part of a 9,000-member, 22-nation, Polish-led force since September. They were the first fatalities suffered by the Bulgarian light infantry battalion. Twenty-seven other Bulgarian soldiers were wounded in the attacks.

In early January, Chief of the General Staff Nikola Kolev said that, in view of the fatalities, some 40 soldiers had pulled out of the volunteer 500-member replacement battalion preparing to head for Iraq to relieve the Bulgarian contingent. Although military service is mandatory in Bulgaria, participation in international missions is voluntary.

Gen. Kolev stated that, although the soldiers would be free to decline serving in Iraq, they would be required to reimburse the military for the training and medical exams they had undergone to get ready for the mission.

Prime Minister Simeon Saxe-Coburg Gotha stated that Bulgaria would not remove its soldiers from Iraq, while Foreign Minister Solomon Passy said such incidents would strengthen the country’s resolve to be even more active in the fight against terrorism.

On December 22, the Bulgarian parliament approved the possible establishment of U.S. and NATO military bases in Bulgaria. Talks between Sofia and Washington on the matter are currently underway.

December 12, 2003
U.S. Consults Sofia on Basing Realignment
Washington, D.C. - U.S. Undersecretary of Defense for Policy Douglas Feith met with Bulgarian leaders in Sofia to discuss Bulgaria’s offer to host U.S. military bases on its territory as part of a global realignment of American troops and bases to react more quickly and efficiently to new post-Cold War threats such as terrorism and the spread of weapons of mass destruction.
Feith stated that, in his talks with President Georgi Parvanov, Prime Minister Simeon Saxe-Coburg Gotha, Foreign Minister Solomon Passy, and defense officials, strategy and broad military concepts were discussed, without addressing "specific questions of redeployment." He said more detailed talks with Sofia on the matter would be carried out early in 2004. Bulgaria officially becomes a NATO member next year.

The U.S. military has previously stated that it would like to move four squadrons of C-130 transport aircraft from Ramstein, Germany, to Bulgaria, as well as reconnaissance U-2 and RC-135 aircraft currently in Britain. The U.S. is also interested in using Bulgarian Army practice grounds to train forces. Bulgaria granted the United States the use of an airport by refueling aircraft engaged in the campaigns in Afghanistan and Iraq.

October 31, 2003
Ruling Party of Ex-King Suffers Defeat in Local Elections
Washington, D.C. - The main opposition Socialist Party of former communists won a decisive victory over the center-right party of Bulgaria’s prime minister and former king Simeon Saxe-Coburg Gotha in the October 26 municipal elections, regarded as an indicator of how Bulgarians will vote in the 2005 parliamentary elections, just two years before the country’s expected entry into the European Union.

The Socialist Party (PSB) last governed the country from 1994 to 1997, when it was forced to call early elections as the country approached the brink of economic collapse.

The PSB received 30 percent against the 10 percent garnered by the National Movement for Simeon (NMS). The conservative United Democratic Forces (UDF) placed second with about 20 percent, while the Movement for Rights and Freedoms, the NMS’s predominantly ethnic-Turkish coalition partner, received 9 percent.

The plummeting support for the NMS, in contrast to its 43-percent showing in the June 2001 parliamentary elections that brought it to power, was attributed to the public perception that Saxe-Coburg Gotha has failed to follow through on promises to improve living standards and reduce corruption within 800 days of becoming prime minister, which is about the length of time he has been in office.

Although his government has increased the average annual salary from about $1,380 to about $2,040 over the past two and a half years and has cut unemployment from about 18 percent to about 13 percent, recent polls indicated that about 70 percent of the population believed his government had failed to meet expectations in its attempt to shore up the economy, following a decade of persistent poverty. The country’s GDP stands at 80 percent of the 1989 level. Growth was 4.8 percent in 2002 and is expected to be 5.0 percent this year.

In Sofia, the current mayor, Stefan Sofiyanski, a former member of the UDF who has formed his own center-right party, and a Socialist Party candidate, Stoyan Alexandrov, both received about 30 percent of the votes and will take part in a run-off election on November 2, along with candidates in more than 180 municipalities where the 50 minimum percentage of the votes was not received by any candidate. The NMS’s mayoral candidate in Sofia, Vasil Ivanov-Luciano, won about 6 percent of the votes.

In the run-off election for the mayor of Plovdiv, Bulgaria’s second-largest city, an independent candidate who is being supported by the UDF is expected to win. In Varna, the country’s third-largest city, an independent candidate supported by the Socialist Party was elected mayor in the first electoral round.

October 17, 2003
Sofia Willing to Host U.S. Base, Train Iraqi Police
Washington, D.C. - Following talks with Bulgarian Foreign Minister Solomon Passy and Speaker of Parliament Ognyan Gerdzhikov in Washington, Secretary of State Colin Powell said that Bulgaria was interested in hosting a U.S. military presence if it is determined that such an eventuality “would serve our mutual interests.”
Powell stated that it was "premature to talk about any specific place or any specific presence," since Secretary of Defense Donald Rumsfeld was still studying the positioning of U.S. forces in Europe and other parts of the world. He noted that further discussion of the matter would be carried out by the Pentagon and Bulgarian military authorities.

The secretary thanked the officials for the strong support the Bulgarian government had provided to Washington concerning the U.N. Security Council resolution authorizing an American-led multinational force in Iraq and for Sofia's backing of U.S. efforts in Iraq and the global war on terrorism.

Passy, in turn, thanked Powell for Washington's support for Bulgaria's accession to NATO in 2004 and for “the friendship which we have in Afghanistan, Iraq, the Security Council, and elsewhere.” Bulgaria currently deploys troops in both Afghanistan and Iraq.

Passy and Gerdzhikov, as well as Minister of Finance Milen Velchev, were part of a delegation of Bulgarian officials visiting Washington to commemorate 100 years of U.S.-Bulgarian diplomatic relations.

During a meeting between Velchev and Dov S. Zakheim, U.S. Undersecretary of Defense and Chief Financial Officer for the Department of Defense, the United States requested that Bulgaria train Iraqi police on its territory. In Sofia, Interior Minister Georgi Petkanov confirmed that Bulgaria would train these police, though the number of trainees and the instruction schedule remained to be worked out.

Velchev's discussions with U.S. officials, including Undersecretary of State for Economic, Business, and Agricultural Affairs Alan Larson, also covered Sofia's desire to collect the $1.7 billion debt it is owed by Iraq, which constitutes about 12 percent of Bulgaria's GDP.

August 29, 2003
Holy Islamic City in Iraq Under Bulgarian Military Control
Washington, D.C. - The United States on August 26 handed over military control of Karbala, one of the holy cities for Shiite Muslims, to Bulgarian Lt. Col. Petko Marinov and a 250-member Bulgarian battalion. In April, more than a million Shiite pilgrims gathered in Karbala, a city of 750,000, during a pilgrimage that had been outlawed for nearly 30 years by Saddam Hussein. About 60 percent of Iraq’s population is Shiite.

A total of 485 Bulgarian troops are serving in Iraq as part of a 9,500-member multi-national force led by Poland. This force will be responsible for securing the sector in south-central Iraq that has been under the control of U.S. Marines. Lt. Col. Marinov will report to a Polish commander after the sector is formally transferred to Polish command on September 3.

August 22, 2003
Mechanized Unit to Serve in Afghanistan
Washington, D.C. - A mechanized unit of 50 Bulgarian troops arrived in Afghanistan to participate in the International Security Assistance Force (ISAF), a peacekeeping force deployed in Kabul to help the country develop a security infrastructure, train the Afghan police and armed forces, and assist in reconstruction.

The unit is working with the 1,500-member German brigade, the second-largest contingent in the force, and will carry out patrol and guard duties. A separate 20-member team of Bulgarian military personnel arrived in Kabul earlier in the summer to train the Afghan army and teach recruits how to maintain the country's Soviet-era tanks and armored personnel vehicles.

The 25 members of the Bulgarian military unit specializing in protection against nuclear, biological, and chemical (NBC) weapons, which had served in Afghanistan since February 2002, have returned to Bulgaria.

About 5,500 troops are serving in the 32-nation force, including 125 from Greece, 163 from Turkey, 23 from Albania, 10 from Macedonia, 110 from the United States, and 1,900 from Canada, the lead troop contributor. In addition to the American soldiers in ISAF, the U.S. has about 8,400 troops in Afghanistan.

Bulgaria also has 485 peacekeepers in Iraq, which are serving in a Polish-led brigade.

On August 11, NATO assumed the command of ISAF. German Army Lieutenant-General Goetz Gliemeroth is the ISAF commander, and Canadian Army Major-General Andrew Leslie is the deputy commander.

Since the formation of ISAF under a U.N. mandate in December 2001, the command of the force has passed, at approximately six-month intervals, from Britain to Turkey to a joint Dutch-German command.

The mission, which is NATO’s first outside Europe, will continue to operate under the U.N. mandate and will be run by the alliance's Allied Forces North (AFNORTH), based in Brunssum in the Netherlands.

August 8, 2003
Black Sea Naval Exercises Boost Humanitarian, Environmental Cooperation
Washington, D.C. - Ships from Bulgaria, Romania, Georgia, Ukraine, Russia, and Turkey will conduct exercises in the Black Sea this summer aimed at training the countries to carry out joint search and rescue operations and activities that will contribute to enforcing protection of the area’s environment.

The exercises are held annually by these countries bordering the Black Sea. In 2001, they established an on-call joint naval force, BLACKSEAFOR, which is specifically focused on performing search and rescue missions, minesweeping, and dealing with environmental concerns, such as the clean up of oil spills, in a sea that is heavily traveled by oil tankers heading toward the Bosporus to gain access to the Mediterranean. The command of the force, which has no offensive capability, rotates annually.

August 8, 2003
Troops to Deploy in Iraq
Washington, D.C. - A contingent of 485 Bulgarian soldiers will be on the ground in Iraq by September 1 to carry out peacekeeping activities under Polish command.
An advance team of 30 soldiers arrived in Iraq in late July to prepare for the deployment of the contingent, which will include mechanized infantry, logistics, and communications units.

July 3, 2003
U.S. Military Funding Halved Over ICC Dispute
Washington, D.C. - The United States is suspending military aid to Bulgaria along with some 35 other countries that have failed to meet a July 1 deadline set by the U.S. government for concluding bilateral agreements with Washington to exempt Americans on their territory from prosecution by the International Criminal Court (ICC).

The U.S. had allocated $19.5 million in Foreign Military Financing (FMF) for 2003 for Bulgaria, which is scheduled to become a NATO member next year. Of this, the funding already allocated for programs in progress, such as the training of Bulgarian military personnel in the United States, will be used, resulting in the suspension of about $10 million of the $19.5 million. The possibility of future U.S. financing of specific military projects will be examined on a case-by-case basis.

Bulgarian Foreign Minister Solomon Passy stated that Washington's decision had not affected Bulgaria's desire to host permanent U.S. military bases or facilities.

In the Balkans, exemption agreements with the U.S. have been signed by Albania, Bosnia, and Macedonia, which are among 37 countries that have concluded such accords. Romania, which has signed one, is the only country of the seven slated to join NATO in 2004 that is not affected by a U.S. military aid suspension.

Serbia and Montenegro is included in Washington's list of countries that did not meet the July 1 deadline for signing exemption agreements. Its military assistance from the United States for 2003 is limited to about $300,000 for English-language courses for the country's armed forces, funds that will not be affected by Washington's aid suspension policy.

The European Union, which strongly supports the ICC, is opposed to the bilateral agreements exempting U.S. citizens from prosecution by the court.

June 6, 2003
Exchange on Regional Issues with Turkey, Romania
Washington, D.C. - President Georgi Parvanov joined Turkish President Ahmet Necdet Sezer and Romanian President Ion Iliescu for a meeting in the Romanian Black Sea town of Neptun, where they decided that the three countries would hold regular consultations to discuss their progress toward integration into the European Union.

Bulgaria and Romania, which are currently conducting EU accession negotiations, are expected to join the bloc in 2007. If the EU determines that Turkey has made adequate progress toward meeting membership requirements in December 2004, accession talks with Ankara will begin in early 2005.

The three presidents also reaffirmed their countries’ decision to work jointly to combat terrorism, organized crime, human and drug smuggling, and money laundering, while also strengthening their cooperation economically and militarily within NATO. Turkey is already a NATO member, and Bulgaria and Romania will become members next year.

The Neptun gathering was the sixth annual meeting of the heads of state of these countries. The last meeting was held in May 2002 in Cesme, Turkey. The interior ministers of the three countries also met last month to discuss measures to prevent organized crime.

May 23, 2003
Troops to Go to Iraq
Washington, D.C. - The Bulgarian cabinet has decided to send 500 troops to Iraq to assist with peacekeeping and reconstruction activities. Approval of the decision is expected by parliament.

The troops are expected to be deployed in the Polish sector of Iraq for about a year, with rotation of the soldiers taking place every four months.

Bulgaria had earlier signed an agreement with the United States to deploy a 97-member military unit specializing in protection against nuclear, biological, and chemical weapons to a country neighboring Iraq in order to assist in the war effort, but the war ended before it could be sent to the region.

May 23, 2003
IMF Praises Economic Performance
Washington, D.C. - The International Monetary Fund, reviewing its two-year $300 million standby loan agreement with Sofia, praised Bulgaria’s economic performance, with a projected gross domestic product growth of 5 percent this year on the basis of strong activity during the first quarter.
In 2002, Bulgaria achieved growth of 4.8 percent, compared to an average of 0.8 percent growth among European Union countries.

The IMF stated that a solid increase in exports and a strong tourist season were expected to contain the external current account to about 4.5 percent of GDP in 2003, while inflation has increased by only 1.5 percent since the end of December 2002.

While commending the government for “over-performance of revenue collection and cautious discretionary spending,” the Fund stated that part of Bulgaria’s reserves would be needed to deal with mounting arrears in the health care and municipal sectors, where reforms have been progressing more slowly. In addition, more attention must be paid to structural reforms, including the sale of the state tobacco monopoly Bulgartabac and the Bulgarian Telecommunications Company.

The government has introduced new measures to combat smuggling and a shadow economy, including the tightening of customs and tax control, as well as the establishment of a bureau for fiscal investigation, a national revenue agency, and a center for complaints concerning corruption and negligence.

The IMF’s final review under the loan agreement is expected in November 2003.

May 16, 2003
Powell Thanks Bulgaria for Backing Iraq War
Washington, D.C. - Secretary of State Colin Powell visited Sofia to thank the Bulgarian government for its support for the U.S.-led war in Iraq, emphasizing that Washington would like to build closer relations with the Balkan country.
Bulgaria was a supporter of Washington’s stance on Iraq at the United Nations Security Council and also granted the U.S. military the use of the Sarafovo airport near the Black Sea port of Burgas during the campaigns in Iraq and Afghanistan.

Bulgaria, which is slated to become a NATO member early next year, has also expressed its readiness to allow the United States to establish permanent military bases on its territory. Powell congratulated the Bulgarian government on the May 8 U.S. Senate ratification of Bulgaria’s candidacy for NATO membership, along with the candidacies of six other nations.

Powell, who also addressed a public gathering in Sofia marking the celebration of 100 years of U.S.-Bulgarian diplomatic relations, pledged Washington’s support for Bulgaria’s efforts to fight corruption, implement judicial reforms, and spur economic growth.

May 16, 2003
Cooperation with Turkey and Romania on Fighting Crime
Washington, D.C. - The interior ministers of Bulgaria, Turkey, and Romania, meeting in the Turkish Mediterranean coastal town of Kemer, signed a memorandum of understanding committing the three countries to joint action against organized crime, including the prevention of terrorism, human smuggling, and drug trafficking.

The officials agreed to establish a high-level committee of experts to deal with these issues and said they would take steps to ease travel restrictions between their countries. They also discussed establishing a center to coordinate the activities of their coast guards and border police.

With the entry of Bulgaria and Romania into NATO slated for 2004, the ministers agreed that future cooperative efforts should involve strategic issues.

April 11, 2003
Nuclear, Biological, Chemical Unit to Assist Iraq War Effort
Washington, D.C. - Bulgaria signed an agreement with the United States to deploy a 97-member military unit specializing in protection against nuclear, biological, and chemical (NBC) weapons to a country neighboring Iraq in order to assist in the war effort. Bulgarian media reports stated that the unit would go to Jordan.

The Bulgarian government originally offered an NBC unit of 150 soldiers, but the number was reduced when the United States agreed to provide personnel to handle logistics, policing, and other support functions required by the unit. The U.S. will also pay the expenses for the maintenance and transport of the unit, while Bulgaria will pay the salaries of the troops, which will not take part in combat.

Bulgaria has maintained a 30-member NBC unit in Afghanistan for more than one year. It has been involved primarily in maintaining water supplies for peacekeeping troops in the multinational International Security Assistance Force (ISAF), which is currently commanded by Germany and the Netherlands.

March 14, 2003
Deputy Defense Minister Holds Talks in U.S. on NATO AccessionIraq War
Washington, D.C. - Bulgarian Deputy Defense Minister Ivo Ivanov, during a visit to Washington, discussed Bulgaria's impending membership in NATO and its role in the war against Iraq with State Department and Pentagon officials.

The minister's meetings, which included talks with Principal Deputy Assistant Secretary of Defense for International Security Policy David Trachtenberg, Deputy Assistant Secretary of Defense for NATO and Europe Ian Brzezinski, and Deputy Assistant Secretary of State for European and Eurasian Affairs Janet Bogue, covered issues related to the ratification of Bulgaria's accession to NATO by the United States and the other 18 alliance members.

U.S. congressional hearings on the ratification process are to begin following the March 26 signing of accession protocols in Brussels for all seven countries that have been invited to join the alliance. By April 2004, all the countries are expected to become NATO members.

Talks with Pentagon officials addressed the upcoming destruction of the propellant systems of Bulgaria's Soviet-made SS-23 missiles, the last stage of the process of destroying all the country's Warsaw Pact-era missiles, which has been financed by the United States.

Other topics raised were the need for Bulgaria to procure communications systems capable of handling NATO classified information and to tighten controls on the export of defense equipment from Bulgaria.

Bulgaria has offered to deploy a 150-member unit capable of responding to nuclear, chemical, and biological attacks during the Iraq war. In addition, it has opened its airspace to U.S. aircraft and has authorized the use of the Sarafovo airport at the Black Sea port of Burgas by the U.S. military. About 350 U.S. military personnel are currently based at the airport, which is hosting planes to be used for the refueling of aircraft flying missions to Iraq.

Washington currently provides Bulgaria with $1.5 million annually for the training of its military officers in the U.S., as well as $10 million a year for the development of military information technology and communication systems, and the upgrading of management techniques in the armed forces.

February 27, 2003
Prime Minister Meets with Bush on IraqBilateral Issues
Washington, D.C. - President Bush discussed the Iraq crisis, security matters, and bilateral issues with Prime Minister Simeon Saxe-Coburg-Gotha of Bulgaria, which has opened up its airspace and granted the use of an airport at the Black Sea port of Burgas to the U.S. military in conjunction with a possible war in Iraq.
The prime minister, who was accompanied on his visit to Washington by Bulgarian Defense Minister Nikolai Svinarov and Foreign Minister Solomon Passy, stated that Bush had pledged guarantees for Bulgaria's national security in the event of military action against Iraq. White House Press Secretary Ari Fleischer said the United States has a strategic partnership with Bulgaria.

Bulgaria is the only non-permanent member of the U.N. Security Council other than Spain that has expressed support for a second draft resolution on Iraq submitted to the Council by the United States, Britain, and Spain on February 24. The aim of the resolution is to gain U.N. backing for military action against Iraq.

Svinarov and Passy met with members of the Senate Foreign Relations Committee to discuss issues concerning Bulgaria's reforms and its preparations for NATO membership, while Passy also met with Assistant Secretary of State for European and Eurasian Affairs Elizabeth Jones. Last year, NATO invited Bulgaria to begin accession talks with the alliance. It is expected to become a member in 2004.

February 14, 2003
Access to Airspace, Base for U.S. in Iraq War
Washington, D.C. - The parliament voted to allow U.S. and allied troops the right to conduct overflights through Bulgaria's airspace and to transit the country for a period of six months in the event of a war in Iraq. A poll indicated that about 43 percent of Bulgarians supported the decision, while about 48 percent were opposed.

The parliament also authorized the U.S. and allied air forces to use the Sarafovo civilian airport at the Black Sea port of Burgas. The U.S. is expected to base aerial refueling aircraft at the airport, as it did in November and December 2001 during the U.S.-led campaign against Afghanistan.

The Bulgarian military has offered to provide additional security for the airport and will make accommodations available to U.S. personnel at a military recreation center at the port. In addition, a large oil refinery in Burgas will provide the fuel needed.

Bulgaria is training and equipping a 150-member decontamination unit that specializes in responding to attacks by nuclear, chemical, and biological weapons, and has offered to contribute it to the war effort.

In the 15-member U.N. Security Council, Bulgaria has supported the U.S. position that the time allotted for weapons inspections in Iraq is running out and that armed force may be necessary.

Bulgaria began conducting negotiations for NATO accession in January, after being formally invited to join the alliance at the November 2002 NATO summit in Prague. It is expected to become a member in 2004.

February 14, 2003
IMF Cites Positive Economic Gains
Washington, D.C. - Stating that Bulgaria's economic progress had been impressive despite the weak economies in its major trading partners, the IMF released a $36 million installment of a $330 million two-year stand-by loan approved in February 2002.

The IMF stated that Bulgaria's currency board, the center of its economic program, had been supported by a flexible fiscal policy and strict control on wages, contributing to growth, declining inflation, and foreign reserves that were stronger than expected.

Crucial privatizations in the financial sector, the implementation of a bankruptcy law for banks, and increases in utility rates were also cited as positive. Unemployment declined significantly in 2002, although it currently stands at 17 percent.

The IMF urged Sofia to move ahead with key reforms, such as completing the privatization of the state-owned tobacco and telecommunication companies, and simplifying business regulations and increasing labor market flexibility in order to attract more foreign investment and reduce unemployment. The lender also encouraged the government to reform municipal finances, and revamp the hospital, railway, and heating sectors.

Bulgaria has already drawn about $115 million of the IMF loan.

January 10, 2003
Defense Budget Increases Following Invitation to Join NATO
Washington, D.C. - As Bulgaria's first round of talks with NATO on its accession commitments gets underway on January 13, seven weeks after being asked to join the alliance at the Prague NATO summit, the Ministry of Defense's plans to comply with alliance directives will be backed by a $480 million defense budget for 2003, up almost $70 million from the previous year. The 2003 budget represents 2.49 percent of Bulgaria's GDP, falling within the NATO's requirements.

To conform to the alliance's requirement that a member country's armed forces should be streamlined and efficient, Bulgaria reduced its armed forces, comprised of over 100,000 troops in 2001, by 44 percent in 2002 to 53,000. The downsizing will continue this year to reach 45,000 by 2004. Some $22.3 million will be spent in 2003 to provide severance payments and vocational training for military personnel that are laid off.

The Ministry of Defense plans to complete its military modernization by 2015. It has already taken initial steps to adapt Bulgaria's military infrastructure to NATO standards in order to provide support for U.S.-led operations in Afghanistan and NATO-led peacekeeping missions in the Balkans. These include establishing a center to exchange airspace data with similar centers in NATO member countries, launching a Field Integrated Communications and Information system, and setting up an Automated Information System for strategic and operational civil-military air traffic control.

The Graf Ignatievo airfield in central Bulgaria has been modernized to meet alliance standards, while the country can also provide NATO with two naval bases on the Black Sea, a land base with a training field in southern Bulgaria, and several airfields. The country can also provide nuclear, biological, and chemical defense units in the event that alliance forces are confronted with weapons of mass destruction capability.

Twelve of the country's 21 Russian-made MiG-29 fighter jets are being upgraded to NATO interoperability standards and will be ready for use by the end of April 2003. About 100 Soviet-era OTR-23, FROG-7, and Scud surface-to-surface missiles have been dismantled and destroyed.

November 22, 2002
Invitation to Join NATO Extended at Prague Summit
Washington, D.C. - NATO asked Bulgaria to join the alliance at the November 21-22 Prague summit, along with Estonia, Latvia, Lithuania, Slovenia, Slovakia, and Romania. It was the largest expansion in NATO's history, projecting its political influence farther east.

Bulgaria's candidacy for NATO membership was advanced by Sofia's immediate offer to assist the Bush administration in its war on terrorism in the aftermath of the attacks of September 11, 2001. A significant contribution to the war effort in Afghanistan was Sofia's decision to make a Bulgarian air force base at Burgas on the Black Sea available to U.S. tanker planes refueling aircraft for the Afghanistan campaign.

Bulgaria began a radical reduction in the size of its armed forces in 1997 in preparation for membership in the alliance. Following a difficult passage from communism to a market economy, the country is struggling with a 17.5 percent unemployment rate; a low standard of living, with annual income at $1,460; an inflation rate of about 11 percent; corruption; and organized crime.

NATO's expansion to 26 members reflects its transformation from a defensive alliance defined by the former East-West rivalry to an alliance designed to deal with threats of terrorism in a post-September 11 environment and the proliferation of weapons of mass destruction far beyond the western European borders that NATO was created to defend.

Alliance membership for the former communist countries of central and eastern Europe is also seen as a way of encouraging the growth of democracy and market economies in these nations.

November 8, 2002
Plans for Pipeline Between Bulgaria and Greece Move Forward
Washington, D.C. - Bulgarian Prime Minister Simeon Saxe-Coburg-Gotha, during his first state visit to Athens, joined Greek Prime Minister Costas Simitis in announcing that the two leaders had agreed to grant Bulgaria, Greece, and Russia equal stakes in a planned 160-mile oil pipeline from the Bulgarian Black Sea port of Burgas to the Greek Aegean port of Alexandroupolis, opening the way for final business arrangements for the project. The heads of government presented no specific construction timetable for the pipeline.

The project has been on the drawing board for over seven years due to the inability of the three nations to agree on whether each should participate equally in the $670 million pipeline, which will carry 35 million tons of Russian crude oil annually. Greece had long sought more than a one-third share and had maintained that Bulgaria should have less than a one-third share, claiming that its northern neighbor lacked sufficient funds to hold a larger stake in the pipeline.

During the Bulgarian prime minister's visit, the two countries also signed an environmental protection agreement and renewed an air transport accord.

Simitis proposed that Bulgaria be asked to accede to the European Union in 2007, while also reiterating the Greek government's support for the country's inclusion in NATO. Bulgaria, which has dismantled all of its Soviet-made missiles, is expected to be asked to join NATO at the alliance's November 21-22 summit in Prague.

Greece ranks first in overall foreign investment in Bulgaria. Bilateral trade from January to August 2002 reached $640 million, while total trade in 2001 was $860 million.

October 4, 2002
Invitation to Join NATO Anticipated in November
Washington, D.C.- NATO is expected to invite Bulgaria to join the alliance at its November summit in Prague, according to U.S. and European officials. The other countries that are expected to receive invitations are Romania, Estonia, Latvia, Lithuania, Slovakia, and Slovenia.

Bulgaria and Romania are lagging behind the other five candidates in meeting NATO’s political, economic, and military requirements. Their inclusion in this round of expansion is largely considered a result of the global political climate of the post-September 11 era, in which the United States has widely sought allies in its fight against international terrorism.

Bulgaria and Romania have both opened their airspace and land and port facilities to U.S. forces, while also sending troops to Afghanistan to serve as peacekeepers in the International Security Assistance Force (ISAF). The two countries have also tripled their presence in peacekeeping missions in the Balkans to free up allied troops for the campaign in Afghanistan. U.S. tanker aircraft used to refuel warplanes carrying out missions in Afghanistan were based at a military airport at the Bulgarian port of Burgas, while a military facility in the Romanian city of Constanza became a staging ground for U.S. troops rotating in and out of the Balkans and other theaters.

Both Greece and Turkey have been pushing hard for the admission of Bulgaria and Romania to the alliance. Albania and F.Y.R. Macedonia have also applied for NATO membership, but they are not expected to be included in this year’s enlargement.

Bulgaria began its two-year term on the 15-member U.N. Security Council in January 2002.

June 14, 2002
Socialist Party on Strong Reformist Path
Washington, D.C. - The domination of the reformist wing of the opposition Socialist Party over the party’s former communist hardliners was solidified with the re-election of its young, Western-oriented leader, Sergi Stanishev.

The June re-election of Stanishev, 35, who took over the leadership of the party in December 2001 when its leader Georgi Parvanov was elected president of Bulgaria, was expected to place the party on a firm footing toward western European social democracy and support for Bulgaria’s entry into NATO and the European Union.

Parvanov had begun the process of reforming the Socialist Party. When he became party leader in 1997, the Socialists were the only party that opposed the country’s application to join NATO. Bulgaria hopes to be asked to join NATO at the alliance’s November summit in Prague.

May 24, 2002
Regional Force Prepares for Possible Deployment Next Year
Washington, D.C. - The seven-nation, Plovdiv-based Southeastern Europe Brigade (SEEBRIG), which began its 12-day annual "Seven Stars" command post exercise in Bulgaria on May 20, is expected to be ready for deployment in a peacekeeping mission by early 2003, possibly in Bosnia.

The force, consisting of 3,000 to 4,000 military personnel from NATO countries Greece, Italy, and Turkey, along with Albania, Bulgaria, F.Y.R. Macedonia, and Romania, declared operational readiness in May 2001, with the caveat that a $10.8 million communications information system, including satellite technology, would have to be developed before the troops could be deployed.

In response to SEEBRIG's request to the Stability Pact for Southeastern Europe for funding for the system, the United States has provided $2.5 million, while Norway has given $578,000. Greece, Romania, and Bulgaria have pledged $500,000, $300,000, and $150,000, respectively, and Turkey has offered to provide new communications equipment. An additional $5 million to $7 million must be raised.

The U.S. is in the process of using the funds to purchase equipment for the system to ensure that it will be interoperable with that of NATO. The force will be available for deployment in peacekeeping or humanitarian operations led by NATO or the European Union and mandated by the United Nations or the Organization for Security and Cooperation in Europe (OSCE).

Each country contributing troops to the force provides funding and equipment for the unit it has earmarked to participate in SEEBRIG missions. The force will not be deployed on the territory of any of its member countries, which rules out its use in F.Y.R. Macedonia, where a NATO peacekeeping mission is currently serving. The new EU rapid reaction force is expected to take over the command of this mission later this year, possibly in September.

At the initiative of the United States, SEEBRIG will participate in exercises with NATO and Partnership for Peace countries in Turkey and Ukraine this year to enhance its interoperability with alliance forces. An exercise to improve the engineering capabilities of the force is also planned in Bulgaria this summer.

A Greek brigadier general is currently commanding the force, while a Romanian now chairs the brigade's Politico-Military Steering Committee. Both positions rotate every two years. The SEEBRIG headquarters rotates every four years, with Romania taking over as host country in September 2003, followed by Turkey in 2007, and Greece in 2011. The U.S., Croatia, and Slovenia have observer status.

SEEBRIG was established in September 1998 and activated in August 1999 as an on-call force. It has no standing force.

May 2002
President Bush Pushes NATO Membership, Military Cooperation
During the visits of Prime Minister Simeon Saxe-Coburg-Gotha and Defense Minister Nikolai Svinarov to Washington, the Bush administration commended Bulgaria for implementing military reforms that will bring the country closer to eligibility for NATO membership.

President Bush expressed his support for Bulgaria's inclusion among the countries to be asked to join NATO at the alliance's November summit in Prague and urged the prime minister to accelerate efforts to carry out the recommendations of the alliance to increase the country's chances of being invited to become a member this year.

Bulgaria has made its airstrips and ports available to the United States military for its war on terrorism. In November and December, U.S. tanker aircraft based temporarily in Bulgaria were used to refuel fighter aircraft deployed in Afghanistan.

The plan for the modernization of the Bulgarian armed forces by 2015 is based on a joint study by the United States and Bulgaria.

The reforms being launched in Bulgaria to achieve NATO interoperability include restructuring of command and control systems; modernization of radar, communication, and navigation systems for air defense; restructuring of the air force and army; and beefing up intelligence and special forces capabilities.

The United States is providing financial assistance for the destruction of Bulgaria's Soviet-era SS-23, Scudand Frog-7 missiles by the end of October 2002 and for the training of military personnel.

Since the late 1990s, Bulgaria has reduced its military force from about 100,000 to 75,000, and plans to have a force of 45,000 by 2004 in conformity with NATO recommendations.

Saxe-Coburg-Gotha told Bush that he feared an anti-Western backlash if the country is not admitted to the alliance. About 76 percent of the Bulgarian population supports the country's entry into NATO. He stated that membership in the alliance would result in greater foreign investment in Bulgaria, whose economy grew by 4 percent last year, one of the strongest growth rates in eastern Europe.

April 2002
Bulgaria Anti-Terror CooperationBoosts NATO Hopes
Eager to be among the countries included in the next expansion of NATO, to be determined at the alliance’s November summit in Prague, Bulgaria has indicated to Washington that it will make its airstrips and ports available to United States forces for future campaigns in the war on terrorism, including possible action against Iraq.

The strategic importance of the Black Sea region as a staging area for anti-terrorist military action, following the events of September 11, has markedly improved Bulgaria’s chances of being invited to join the alliance this year, despite its need to fulfill membership requirements such as increasing its defense budget, revamping its military, implementing democratic reform, and fighting corruption.

Bulgaria has already opened its airspace and land and port facilities to United States forces and has allowed Washington to base tanker aircraft used to refuel warplanes in Afghanistan at a military airport at the Black Sea port of Burgas. It has also provided 40 troops to serve as peacekeepers in the International Security Assistance Force (ISAF) in Afghanistan. In addition, there are 130 Bulgarian troops in the SFOR peacekeeping mission in Bosnia and 40 in the KFOR mission in Kosovo.

Greece and Turkey have been encouraging other NATO countries to vote in favor of the admission of Bulgaria, along with Romania, to the alliance, arguing that the expansion of NATO in southeastern Europe is critical to the region’s stability, now that it is on the front line of the war against terrorism. If the two countries are admitted, Greece and Turkey will have a land link to their current NATO partners through Hungary. The foreign ministers of Greece, Turkey, Bulgaria, and Romania meet regularly to discuss Balkan stability and cooperation on NATO issues.

April 2002
Possible Al Qaeda Presence Under Investigation
Bulgarian authorities are using a list of Al Qaeda suspects provided by the U.S. Embassy in Sofia to investigate whether the terrorists who were planning an attack on Americans in Sarajevo are still in the country.

A high-ranking Bosnian official stated that intelligence reports indicated that Al Qaeda operatives had planned such an attack while they were in Sofia in February. The decision to close the U.S. Embassy in Sarajevo and the U.S. Consulate in Mostar for five days in late March was believed to have been linked to this threat.

April 2002
Long Sought Greek Pipeline Link Advances
The development ministers of Bulgaria and Greece, Konstantin Paskalev and Akis Tsohatzopoulos, signed an agreement during a late March visit of the Greek minister to Sofia that grants Bulgaria, Greece, and Russia equal shareholdings in the $616 million planned oil pipeline from the Bulgarian Black Sea port of Burgas to the Greek Aegean port of Alexandroupolis. The accord will enable construction to begin this year.

Lack of agreement over Bulgaria’s demand for a one-third stake in the 160-mile pipeline had delayed the establishment of a consortium to build the project, which was first envisioned in 1994. The initial proposal had given Russia 41 percent, Greece 39 percent, and Bulgaria 20 percent. Settlement of the shareholding issue opens the way for an accord that will finalize arrangements for the consortium, which is expected to be signed in April.

The 35 million tons of Russian oil to be shipped annually through the underground pipeline will arrive at Burgas on tankers loaded at the Russian port of Novorossiysk on the eastern shore of the Black Sea, helping to decrease tanker traffic through the Bosporus and Dardanelles straits.

The primary destination for the oil that arrives in Alexandroupolis will be Western Europe and the United States, which will require the accessibility of large oil tankers to the loading area. There is speculation that the pipeline will be extended to the larger Greek port of Thessaloniki, which can accommodate tankers with greater capacity. Thessaloniki is about 160 miles west of Alexandroupolis.

The Greek and Bulgarian governments also agreed to restructure the electric energy transportation network in the region around their common border in consultation with Turkey.

March 2002
Greek Investment Plan to Pump $480 Million into Bulgaria and other Balkan Nations
During a visit to Sofia to attend the inauguration of Bulgaria’s new president, Georgi Parvanov, Greek Prime Minister Costas Simitis announced that Greece was ready to implement its long-awaited $480 million plan over the next five years to assist in the economic reconstruction of the Balkans. The plan was announced in 1999.
The funds will be spent on construction projects and investments involving Greek companies, as well as feasibility reports, in Albania, Bulgaria, Yugoslavia, F.Y.R. Macedonia, and Romania. The program will be implemented by the Greek Foreign Ministry, which will sign bilateral economic cooperation agreements with each of the countries involved.

Greece is helping the Bulgarian government conduct a long-term assessment of construction projects the country needs to carry out, in an effort to assist in Sofia’s bid to seek financing for certain projects from the European Union.

In talks with Bulgarian Prime Minister Simeon Saxe-Coburg-Gotha and Parvanov, Simitis stated that Bulgaria’s increasing economic stability was encouraging for Greece’s business sector, the second-largest foreign investor in the country. Simitis estimated that about 800 Greek companies were operating in Bulgaria, creating 70,000 jobs. The level of bilateral trade rose to $700 million in 2001 from $243 million in 1991.

In discussions about the planned oil pipeline to pump Russian oil between the Bulgarian Black Sea port of Burgas and the Greek Aegean port of Alexandroupolis, Simitis stated that the joint Bulgarian-Greek-Russian project was a step closer to becoming a reality following the Athens visit of Russian President Vladimir Putin, who indicated that prospects were good for securing adequate quantities of Russian oil to make the pipeline viable.

March 2002
High-Level Turkish Visits Promote Bilateral Economic Cooperation
During separate visits by Turkish Prime Minister Bulent Ecevit and Deputy Prime Minister Mesut Yilmaz to Sofia, the Turkish and Bulgarian delegations discussed measures to be taken to improve bilateral trade, develop free-trade zones, standardize customs operations, and advance cooperation in the agricultural, energy, industry, transportation, telecommunications, tourism, and health sectors.
Bulgaria is Turkey’s third-largest trading partner in the Balkans, with a bilateral trade volume of $718 million in 2000, of which $465 million constituted Bulgarian exports.

Prime Minister Saxe-Coburg-Gotha urged greater Turkish investment in Bulgaria, citing the construction of a new checkpoint on the border with Turkey that will facilitate the two-way movement of goods and people.

March 2002
Greek Assistance in Upgrading Military to NATO Standards
Greece is working with Bulgaria to help it meet the criteria for NATO membership. Its efforts include assistance in reorganizing the Bulgarian military and upgrading its arsenal to conform to NATO standards.
To further this goal, Greece and Bulgaria signed a memorandum of cooperation, which provides for technology transfers and joint defense industry initiatives, during a visit by Greek Defense Minister Yiannos Papantoniou to Sofia for talks with his Bulgarian counterpart Nikolay Svinarov, Prime Minister Saxe-Coburg-Gotha, and President Parvanov. A Greek officer will be stationed permanently at the Bulgarian Defense Ministry to help coordinate the reforms being implemented.

Bulgaria hopes to be invited to join NATO at the alliance’s summit in Prague in November 2002.

March 2002
Russian Modernization of Fighter Jet Fleet
Bulgaria has awarded a tender to the Russian Aircraft Corporation MiG for the modernization of its fleet of aging MiG-29 fighters in a deal that could be worth up to $50 million.

The project involves 16 fighter jets and four trainers, with the upgrading of four to six aircraft expected this year. Currently, only three of the aircraft are operational.

MiG will be responsible for restoring the flight-readiness of all the jets, while subcontracting out the work of modernizing the fleet to meet NATO standards, including the installation of new navigation systems. MiG Aircraft Product Support (MAPS), a German-Russian joint venture, has been suggested as the firm that will most likely carry out the modernization of the aircraft.

January/February 2002
Airfield Provides Afghan War Support
Six U.S. Air Force KC-135 tanker aircraft and 200 U.S. military ground personnel were deployed to a Bulgarian airfield near the Black Sea port of Burgas from late November to late December in support of anti-terrorism operations in Afghanistan.

The aircraft provided aerial refueling for cargo planes participating in supply and humanitarian aid missions in Afghanistan at the height of the U.S.-led bombing campaign. The one-month deployment was carried out under a bilateral agreement with the U.S. that was endorsed unanimously by the Bulgarian parliament.

Bulgaria will contribute about 40 troops to the peacekeeping force in Afghanistan, the International Security Assistance Force (ISAF).

January/February 2002
NATO Hopes Bring End to Soviet-Era Military
Foreign Minister Solomon Passy, during a December visit to Washington, told U.S. officials that Bulgaria was seeking to dismantle and scrap dozens of aging Soviet-made SS-23 and Scud missiles on its territory by October 2002 in preparation for possible NATO membership. Bulgaria hopes to be invited to become a member of the alliance during the NATO summit in Prague in November.
The United States has offered to give Bulgaria financial and technical assistance to facilitate the destruction of the offensive missiles, a legacy of the Warsaw Pact. Among the former republics of the Soviet Union that have applied for NATO membership, Bulgaria is the only country that has not yet destroyed its communist-era missiles.

The Bulgarian armed forces will also be downsized by 20,000 over the next two and a half years, reducing the troop number to 45,000 as part of reforms required for NATO membership.

Passy told the Bush administration that Bulgaria had taken strict entry-visa measures to help guard against the entry of terrorists and illegal immigrants into the country, thwarting their ability to take advantage of the right of Bulgarian citizens to travel without visas to most European countries under the Schengen agreement.

November/December 2001
Voter Discontent Seen in Presidential Election
Bulgarian socialist candidate Georgi Parvanov defeated center-right incumbent Petar Stoyanov in the country’s presidential election, reflecting a growing demand for change after 12 years of poverty, joblessness, and corruption since the fall of communism. He is the first socialist to be elected president of the country since 1989.

Support from a party in the ruling coalition representing Bulgaria’s 800,000 ethnic Turks, the Movement for Rights and Freedoms, contributed to Parvanov’s victory.

Parvanov, a former communist, has been the leader of the ex-communist Bulgarian Socialist Party (BSP) since 1996, working to transform it into a social democratic party. He said that he would promote Bulgaria’s rapid entry into the European Union and NATO.

The president has limited powers at home but has a higher profile abroad. The position carries considerable moral authority and legislative veto power.

Stoyanov, an independent backed by Prime Minister Simeon Saxe-Coburg-Gotha, was formerly a member of the Union of Democratic Forces (UDF). His defeat was seen as a sign of discontent over the pace of the prime minister’s reforms.

October 2001
Support for U.S. Following Terrorist Attacks
Prime Minister Simeon Saxe-Coburg-Gotha informed President Bush that Bulgaria would give full support to the U.S. following the terrorist attacks on New York and Washington and would act in accordance with Article 5 of NATO's founding treaty, the North Atlantic Treaty, even though Bulgaria was not yet a member of the alliance.

Article 5 states that an attack on one or more members of the alliance would be considered an attack on all members, enabling the U.S. to call on its allies for military support. NATO invoked the article following the attacks, for the first time in its 52-year history, and pledged collective assistance, should it be requested, in any military operation.

Saxe-Coburg-Gotha stated that the government of Bulgaria actively supported the initiatives launched within the framework of NATO, the Euro-Atlantic Partnership Council (EAPC), and the European Union for the purpose of uniting international efforts to fight terrorism.

Bulgaria's parliament, the Bulgarian National Assembly, unanimously adopted a declaration denouncing the terrorist acts and pledging support for efforts toward finding and punishing those who committed them.

October 2001
Use of Airspace Granted for U.S. Operations

At the request of the Bush administration, Bulgaria granted the U.S. permission to use its airspace for the passage of transport and supply aircraft involved in the anti-terrorist operations under preparation by the U.S. armed forces.

The overflights fall under a transit agreement between Sofia and Washington reached in the spring. President Petar Stoyanov and the members of Bulgaria's Consultative Council on National Security recommended to the foreign ministry that use of the airspace be permitted. The Bulgarian parliament did not have to be consulted concerning the request since no combat aircraft would be involved. A law passed by the parliament in April granted NATO forces the right to transit Bulgaria or temporarily station troops there in times of crisis.

August/September 2001
New Prime Minister Targets EU and NATO Membership
Bulgaria's ex-king and new prime minister, Simeon Saxe-Coburg-Gotha, to be known in Bulgaria as Simeon Coburgotski, has made achieving membership in the EU and NATO his government's primary foreign policy objective. This stance continues a course laid out by the administration of outgoing prime minister Ivan Kostov, under which Bulgaria became a serious candidate for both organizations.

The EU will provide grants totaling $530 million in 2001 and 2002 to assist Sofia in carrying out reforms required for membership in the bloc, such as amending banking laws, revamping the judicial system, privatizing key state assets, and reforming the energy sector. Bulgaria's chief EU negotiator recently said that the country was aiming to complete negotiations with the bloc by 2003 and could be ready to join it by 2005.

Coburgotski hopes an invitation will be extended to Bulgaria for NATO membership by 2004 during the alliance's summit next year. Working toward this goal, he named mathematician Solomon Passy to be foreign minister. Passy is the founder and head of the Atlantic Club, a non-governmental organization that has campaigned for more than a decade for Bulgaria's entry into the alliance.

August/September 2001
Energetic Drive for Investment, Anti-Corruption Campaign

In his push to move forward with his campaign pledge of an 800-day drive for economic and anti-corruption reform, Coburgotski appointed American-educated investment bankers as the country's top two economic and fiscal policy planners.

The appointments of 31-year-old Nikolai Vassileva former senior vice president of Lazard Capital Markets in London and an emerging market analyst, as deputy prime minister in charge of the economy and of 35-year-old Milen Velchev, a former vice president of the emerging markets unit of Merrill Lynch in London, as minister of finance are key to Coburgotski's pledge to appoint professionals untainted by corruption and cronyism to major cabinet posts. They have no political experience, a qualification lacking in most of the cabinet.

The 800-day plan calls for an improvement in living standards, an increase in foreign investment, and a lowering of personal and corporate taxes, while tackling corruption that went unchecked during Kostov's term.

The new government has stated that it will maintain the previous government's economic platform, which halted a severe 1996-1997 economic crisis, led to macroeconomic stability, and resulted in growth of about 4 percent for the last three years as the transformation to a market economy unfolded. In response to the Kostov administration's failure to improve living standards, Coburgotski has suggested that he will be more generous to the country's poor, now totaling half of all Bulgarians.

August/September 2001
Ethnic Turks in Partnership in Ruling Coalition

Coburgotski's National Movement for Simeon II (NMS) was able to form a governing coalition with a party comprised predominantly of ethnic Turks, the Movement for Rights and Freedoms (MRF), led by Ahmet Dogan.

It is the first time the MRF has served in a governing coalition and has had members serving in cabinet posts. This party shares the NMS's drive toward EU and NATO membership. Bulgaria's 800,000 Turks make up 10 percent of the country's population of 8 million.

Winning 120 of the 240 seats in the National Assembly on June 17, one short of an outright majority, Coburgotski's party teamed up with the MRF, which has 21 seats, to ensure a working majority in parliament. Kostov's center-right Union of Democratic Forces (UDF), which holds 51 seats, declined to join the coalition but said it would provide parliamentary support for the new government as it continues the reforms implemented over the past four years.

The ethnic Turks received two of the 16 cabinet posts, those dealing with agriculture and forestry issues and emergency situations, as well as the three posts of deputy minister of economy, defense, and finance. Two cabinet posts, including one of the three deputy prime ministers, went to the Socialist Party of ex-communists, which won 48 parliamentary seats. Kostov's party does not hold any cabinet posts.

Under the late communist dictator Todor Zhivkovethnic Turks were forced to assimilate and assume Slav names, resulting in an exodus of over 300,000 members of the minority to Turkey. Many returned under Kostov's administration as Sofia's relations with Ankara improved.

August/September 2001
Military Border Exercises with Turkey

Military cooperation between Bulgaria and Turkey moved to a higher level with an exchange of soldiers based at towns near the countries' border to allow them to engage in field exercises and weaponry demonstrations.

Twenty Bulgarian soldiers and 20 Turkish soldiers carried out the two-day exercises simultaneously at the Bulgarian base at Kharmanli and the Turkish base at Kirklareli within the framework of a bilateral agreement signed in 1992 to increase border security. To date, bilateral military exchanges have been limited primarily to mutual visits by small high-level military delegations and officer training in the countries' military academies.

During the Cold War, Bulgaria and Turkey were adversaries with large army contingents stationed at their mutual border, along the NATO-Warsaw Pact divide.

July 2001
National Elections Bring Monarch to Lead Government
Former King Simeon II became the new prime minister of Bulgaria after a political movement he headed defeated the center-right coalition led by the Union of Democratic Forces (UDF) of outgoing prime minister Ivan Kostov with 43 percent of the vote in June elections.

Simeon's National Movement for Simeon II took 120 of the 240 seats in the unicameral National Assembly, just one short of an absolute parliamentary majority. The UDF-led alliance won 51 seats, the ex-communist Socialists won 48, and the ethnic Turk Movement for Rights and Freedoms (MRF), representing the country's 10 percent ethnic Turkish minority, won 21.

Negotiations continued between the National Movement for Simeon II and other parties to form a ruling coalition. The parties most likely to join forces with Simeon's party to gain a majority in parliament were the UDF or the MRF, led by Ahmed Dogan. Ekaterina Mihailova, a close aide of Kostov who used to be the UDF's chief secretary, became leader of the UDF following the prime minister's resignation from the position after the elections.

The surprising success of the ex-king's movement, formed just two months before the elections, was seen as a reaction against allegations of high-level corruption and severe reforms initiated by Kostov to effect the country's rapid transition to a market economy.

The reforms, such as the privatization of nationalized industries, have pushed unemployment up to 20 percent, increased taxes, and led to growing poverty, with average income at $1,200 per year. Despite public dissatisfaction, Kostov's reforms brought the country back from near economic collapse in 1997, achieving positive macroeconomic results, including keeping inflation under control and fostering economic growth of 5.8 percent in 2000.

Simeon has pledged to give priority to achieving high economic growth through a radical liberal reform program to attract foreign investment; lowering taxes; carrying out transparent privatization; fighting corruption and crime; and moving Bulgaria toward entry into the EU and NATO.

At the age of 64, Simeon became the first ex-monarch to enter active politics in post-communist eastern Europe. He was forced into exile from Bulgaria in 1946 at the age of 9 by the communists, three years after acceding to the throne, and spent most of his life as a businessman in Madrid.

May / June 2001
NATO Membership Main Issue in U.S. Talks
Bulgarian Prime Minister Ivan Kostov, the first of the leaders of the nine NATO applicant countries to be invited to meet with the Bush administration, made it clear in talks with officials in Washington that Bulgaria expected to be invited to join the alliance at its summit in Prague next year.

In discussions with President Bush, Vice President Cheney, Secretary of State Powell, and other officials, Kostov maintained that Bulgaria's NATO membership was essential for the stability of southeastern Europe. The Bulgarian parliament passed a law granting NATO forces the right to transit Bulgaria or temporarily station troops there in times of crisis in the Balkans. Exploratory talks are reportedly being conducted to examine the possibility of stationing unmanned U.S. reconnaissance aircraft in the country to monitor the situation in F.Y.R. Macedonia.

Last year, Bulgaria began a five-year plan to reduce its armed forces from about 90,000 to 45,000 by 2004 in preparation for NATO membership. Currently at 65,000 troops, the smaller army is expected to be better trained and equipped than previous forces.

An air base near Plovdiv is being modernized to meet alliance standards in preparation for the arrival of planes from NATO countries in September for a Partnership for Peace (PFP) exercise entitled "Cooperative Key" the first PFP exercise to be hosted by Bulgaria.

The U.S. is providing Bulgaria with about $15 million in military assistance for fiscal year 2001, which includes $1.6 million for training Bulgarian military personnel in the United States.

Some 55 to 60 percent of the Bulgarian public support membership in the alliance. Bulgarian officials view NATO membership as critical to political stability, national security, and an improved investment climate in the country.

May / June 2001
Tight Race Seen in June National Election

The general election scheduled for June 17 is expected to be a tightly contested three-way race between the ruling reformist government of Prime Minister Ivan Kostov's center-right Union of Democratic Forces (UDF), the opposition Socialist Party, and a coalition of two parties, the National Movement for Simeon II, led by the country's former king.

Kostov's government has drawn praise from the West for tough fiscal and social reforms that revived a collapsing economy by stabilizing Bulgaria's currency, reducing massive inflation, opening the country to foreign investment, shutting down wasteful state industries, and restoring growth.

However, the reforms have brought high unemployment, currently about 18 percent, and declining living standards with an average salary of $120 a month, while corruption scandals have also eroded public support for the UDF. These factors have resulted in strong support for Simeon, who has promised to fight corruption and solve the country's problems in 800 days through an economic program that includes tax cuts.

A recent poll gave Simeon's movement the support of 35 percent against 18 percent for the UDF and 17 percent for the Socialist Party. Simeon is expected to draw the support of previously disillusioned Bulgarians who typically have not voted in the past.

He acceded to the throne at age 6 in 1943 and reigned under regencies until 1946, when the communists abolished the monarchy. The royal family then went into exile, settling eventually in Spain, where Simeon became a businessman. Simeon, the first of Eastern Europe's former royalty to enter politics, returned to Bulgaria in 1996.

Kostov's government is the first to have completed a full four-year term since the collapse of communism in 1989.

April 2001
Military Supplies to Skopje in Quest for Political Solution
Bulgaria concluded an agreement with the Skopje government to provide it with weapons, ammunition, and technical assistance to upgrade its army, reflecting the Bulgarian government's concern over the fighting in February and March between ethnic Albanian insurgents and the police and army in F.Y.R. Macedonia. Two years ago, Bulgaria gave Skopje surplus tanks.

Bulgarian President Petar Stoyanov suggested that Bulgaria would consider sending troops to help the Skopje government because of the seriousness of the crisis. The government later retracted the proposal, saying that such a move should be taken by the international community, rather than an individual country. Bulgarian Defense Minister Boiko Noev said the country would not send troops unilaterally to its neighbor even if asked by Skopje.

Bulgarian Prime Minister Ivan Kostov stated that Bulgaria did not believe that heavy military force against the ethnic Albanians in F.Y.R. Macedonia was necessary, as he urged a political solution through negotiations. Some 5,000 ethnic Albanian refugees from F.Y.R. Macedonia crossed Bulgaria en route to Turkey as a result of the fighting.

April 2001
Territorial Access to NATO for Crisis Events

The Bulgarian parliament ratified a five-year accord allowing NATO forces access to Bulgaria's territory, including land, sea, and airspace, in the event of a Balkan crisis. The agreement will change Bulgaria's current law requiring that parliament vote on each individual passage of foreign troops through the country.

Bulgarian Foreign Minister Nadezhda Mikhailova said Sofia would also consider granting the alliance the option of setting up bases in Bulgaria if a crisis arose. Sofia is also considering allowing unmanned U.S. reconnaissance aircraft to be stationed in the country to monitor the situation in F.Y.R. Macedonia.

The Bulgarian government gave NATO permission to use its airspace during the 1999 bombing of Yugoslavia. Bulgaria hopes to be named a NATO member next year.

April 2001
Greek-Turkish Anti-Landmine Agreement Welcomed

The Bulgarian government welcomed the decision by Greece and Turkey to simultaneously become signatories of the 1997 Ottawa Convention on the elimination of landmines (see Greece section).

A Foreign Ministry statement said that Bulgaria had already met its obligations as a signatory of the Convention by destroying all mine fields and stockpiled landmines on its territory. In March 1999, Bulgaria and Turkey signed an agreement on the non-use and destruction of landmines in the areas adjacent to their common border. Greece has removed its landmines along the Greek-Bulgarian border.

March 2001
Anti-Crime Cooperation with Romania and Turkey Under EU Guidelines
The presidents of Bulgaria, Romania, and Turkey held a two-day summit in Plovdiv, Bulgaria, to discuss ways to align joint efforts against escalating cross-border organized crime with European Union standards, as part of the preparations of all three countries for joining the EU. Bulgaria and Romania were among the six countries to start EU membership talks last year, while Turkey was named a candidate for membership in December 1999.

The topics covered by Presidents Petar Stoyanov of Bulgaria, Ion Iliescu of Romania, and Ahmet Necdet Sezer of Turkey included strengthening security at their common borders against trafficking in drugs, arms, and people, finding ways to incorporate Serbia into bilateral and multilateral projects to accelerate its integration into the region's economy, and developing transport corridors to improve links between the three countries and the EU.

Sezer pledged to support the bids of Bulgaria and Romania to become NATO members in the alliance's next wave of expansion, expected next year.

March 2001
Greek Border Crossings, Port Use, Pipeline Project Move Forward

During talks in Athens, Bulgarian Foreign Minister Nadezhda Mikhailova and Greek Foreign Minister George Papandreou reviewed ways to facilitate Bulgaria's use of the Greek ports of Thessaloniki and Alexandroupolis in order to enhance access to the Aegean Sea. They also discussed opportunities for Sofia to facilitate Greece's access to Bulgaria's Black Sea ports to allow Greek entrepreneurs to enter new markets.

The two ministers agreed that work on the modernization of three crossings on the Greek-Bulgarian frontier should be accelerated to promote bilateral trade and improve Bulgaria's access to Aegean ports. The World Bank is providing Bulgaria with a loan to carry out the border crossing renovation under its Trade and Transport Facilitation in Southeast Europe Project (TTFSE), which aims at promoting more efficient and less costly trade flows in the region, reducing smuggling and corruption at border crossings, and providing European Union-compatible customs standards. U.S. Customs Service agents have been involved in assessing the conditions of the crossings and providing advice on the upgrading process, under the auspices of the Southeast European Cooperative Initiative (SECI).

Mikhailova and Papandreou also discussed progress on plans for constructing a $658 million pipeline to carry Russian crude oil from the Bulgarian Black Sea port of Burgas to Alexandroupolisa joint project of Bulgaria, Greece, and Russia. The second stage of a $2.2 million feasibility study for the project will be completed by the end of October. The study will be funded by the EU.

Papandreou asked the Bulgarian minister to present ideas that can be considered by Athens when it compiles a list of priorities to be carried out while it holds the rotating European Union presidency in 2003.

March 2001
Senior Iranian Officials Push Stronger Ties

During a visit of the speaker of Iran's parliament, Mehdi Karroubi, to Sofia, Bulgarian and Iranian officials agreed to establish a joint commission to step up trade between the two countries. Sofia has a trade surplus with Tehran, exporting goods worth $13 million to Iran during the first nine months of 2000.

Karroubi's trip was the first visit to Bulgaria by an Iranian legislative leader since Iran's 1979 Islamic revolution. He was accompanied by Trade Minister Mohammad Shariatmadari, Transport Minister Rahman Dadman, and Education Minister Mostafa Moin.

Karroubi and Bulgarian Prosecutor General Nikola Filchev discussed working together to fight drug trafficking and other types of organized crime, while Moin and Bulgarian Education Minister Dimiter Dimitrov pledged to expand cooperation in education, science, and culture. An Iranian business delegation will visit Bulgaria in April to explore furthering bilateral contacts in the business sector.

January / February 2001
EU Opens Eastern Doors
The European Union justice and interior ministers agreed to an unconditional lifting of the need for Bulgarian citizens to obtain entry visas when traveling to EU countries for stays of less than three months for purposes other than employment. Formal lifting of the restriction must be debated by the European Parliament and will take several months.

Bulgaria and Romania are the only European Union candidates from former communist countries that are still subject to visa restrictions when entering the EU due to the bloc's concerns over immigration controls at their borders with countries of the former Soviet Union and Turkey, known to be sources of trafficking in illegal migrants moving toward the EU. The ministers agreed to set conditions that would allow the eventual lifting of the visa restriction on Romania.

Before the visa decisions are implemented, the European Commission will be expected to report on the progress made by both countries in combating illegal immigration. Bulgaria and Romania were invited to begin membership talks with the EU in December 1999.

January / February 2001
Enhanced Cooperation with Greece on Transnational Crime Threats

In conjunction with the European Union's plans to lift its visa requirement for Bulgarian nationals, Greek Public Order Minister Michalis Chrysochoidis met with Bulgarian Interior Minister Emanuil Yordanov in Athens to update documents regulating bilateral and multilateral cooperation in the fight against transnational organized crime to meet EU criteria.

The ministers agreed to step up bilateral cooperation in the exchange of information that will aid apprehension of smuggling rings, criminal groups, and individuals involved in car theft. Regular meetings of regional directorate officials and border police on both sides of the Greek-Bulgarian border will be implemented to improve joint efforts in the prevention of transnational organized crime. Anti-drug trafficking experts from both countries will also exchange visits and conduct seminars to plan joint action in their field.

The European Union is expected to allocate about $500 million to Greece under the bloc's Interreg program to fund the Greek government's cross-border cooperation programs with Albania, Bulgaria, Cyprus, and F.Y.R. Macedonia.

November / December 2000
Continued Expansion of Greek Cooperation, Investment
Greece's allocation of $62 million for the upgrading of Bulgaria's infrastructure was a focus of the visit of Greek National Economy Minister Yiannos Papantoniou to Sofia, part of a Balkan tour that also included Belgrade and Skopje.

The funding, to be utilized over the next three years, is part of the Greek government's $318 million program for economic reconstruction in the Balkans announced in November 1999, which was increased to $572 million with the inclusion of Yugoslavia following the electoral defeat of former Yugoslav president Slobodan Milosevic.

The economy minister, accompanied by a Greek regional minister, parliamentary deputies, and over 40 businessmen from all sectors of the Greek economy, discussed avenues for the expansion of bilateral economic cooperation with the Bulgarian leadership and attended a Bulgarian-Greek business forum organized by the Bulgarian Chamber of Commerce and Industry.

Greece is particularly active in the Bulgarian banking sector. In addition, Greece is cooperating with Bulgaria and Russia in the construction of an oil pipeline from the Bulgarian Black Sea port of Burgas to the Greek Aegean port of Alexandroupolis.

Greece is Bulgaria's fourth-largest trading partner globally and the third-largest among European Union countries.

October 2000
Multinational Balkan Force Holds First Field Exercise
The first field exercise of the 3,000-member, seven-nation Southeast European Brigade (SEEBRIG) was conducted in September, bringing the force closer to its goal of deployment readiness by the end of this year.

The independent force was created in September 1998 for the purpose of establishing multinational support among countries in southeastern Europe for regional peacekeeping and humanitarian efforts.

Units from member nations Albania, Bulgaria, Greece, Italy, F.Y.R. Macedonia, Romania, and Turkey carried out the exercise, “Seven Stars,” in the Bulgarian town of Haskovo in the presence of Bulgarian President Petar Stoyanov and defense ministers and chiefs of staff from the participating countries.

The brigade’s first headquarters was inaugurated in Plovdiv, Bulgaria, in September 1999, and its first commander is Turkish Brigadier General Hilmi Akin Zorlu. The location of the headquarters will rotate every four years among participating countries, with Romania, Turkey, and Greece lined up for subsequent rotation. Each nation’s military unit will be stationed on its home turf. There will be no special standing force. The U.S. and Slovenia hold observer status. Croatia will also be given observer status.

The command of the force will be assigned to each of the countries for a two-year term, with Greece following Turkey. The presidency and headquarters of the political and military committee of the force will be the responsibility of each of the participating countries for a two-year term. Greece holds the committee’s first presidency.

September 2000
Turkish Energy, Infrastructure Projects Move Forward
Ankara will undertake two major projects in Bulgaria in exchange for larger quantities of electricity from its Balkan neighbor to meet Turkey's growing energy needs.

On a visit to Bulgaria, Turkish Deputy Prime Minister Mesut Yilmaz reviewed Ankara's plans to build a hydroelectric project and improve a section of the Sofia-Istanbul highway, which were mapped out in 1997-1998 when he was prime minister.

The project on the Gorna Arda River, in the Rhodope Mountains in southeastern Bulgaria, will have an annual power output of 466 million kilowatt hours and will help increase power exports to Turkey. The $220 million improvement of a stretch of the Sofia-Istanbul highway in southern Bulgaria will upgrade the road link from Turkey to the "Corridor Eight" artery connecting Bulgaria's port of Burgas on the Black Sea with Albania's Adriatic port of Vlore.

July / August 2000
Oil Pipeline to Link Black, Adriatic Seas
A U.S. company is planning to begin construction of a 567-mile, $1.13 billion oil pipeline next year running from Bulgaria’s Black Sea port of Burgas through F.Y.R. Macedonia to Albania’s Adriatic port of Vlore.

The governments of Albania, F.Y.R. Macedonia, and Bulgaria have granted New-York-based AMBO (Albanian Macedonian Bulgarian Oil Corporation) the exclusive rights for the project, which will be used for the transport of up to 750,000 barrels a day of oil from Russia, Azerbaijan, Georgia, Turkmenistan, and Kazakhstan. A connection linking F.Y.R. Macedonia and a refinery near Belgrade may be considered in the future. The pipeline will reduce tanker traffic through the Bosporus and the Aegean Sea as oil is shipped to northwestern Europe and the U.S. from the Albanian coast.

Construction of the pipeline is expected to take up to four years. AMBO said the feasibility study for the pipeline indicated that it would be economically competitive with and would complement other proposed pipelines in the region.

May / June 2000
Commercial Routes Connect Greece, Romania
Seeking an outlet to the Aegean and Mediterranean seas, Bulgarian and Romanian officials hope to bypass the Bosporus and shorten the transportation distance via an overland route to the port of Kavala in northern Greece instead. The port is currently being expanded to accommodate greater commercial activity.

The officials urged Athens to finish road improvement projects in northern Greece, including the completion of the Egnatia highway, which will run from the Turkish border to the Adriatic Sea, in order to facilitate the transport of goods to the port. The number of border crossings from Bulgaria into Greece is being expanded from two to five, which will encourage the transit of goods.

May / June 2000
International Financial Aid Drives Economic Reform

The European Union will give Bulgaria, a candidate for EU membership, a $223 million grant this year to finance infrastructure projects that will boost growth. The country opened accession talks in March and hopes to complete them by 2006.
The World Bank, which will loan Sofia more than $200 million this year, said that the country's reforms were on track in a resilient economy that has overcome the effects of last year's Kosovo crisis, when trading links with Europe were disrupted. Standard & Poor's recognized Bulgaria's progress by raising the country's credit rating from B to B plus.

In 1999, Bulgaria experienced a 2.5 percent growth rate, largely as a result of the government's efforts to sell state banks, close unprofitable companies, and overhaul the pension system. It is working toward a 4 to 5 percent growth rate this year. A currency board arrangement linking the Bulgarian lev to Germany's mark, strict monitoring of commercial bank activity, and economic austerity measures drastically reduced inflation from 578.6 percent in 1997 to 1 percent in 1998. The rate was 6.2 percent last year.

The World Bank will focus on helping the country increase investment to create more jobs. Unemployment is running at 19 percent, and foreign investment remains at one of the lowest levels in Europe. The individual purchasing power is about 23 percent of the EU average. The Bank also pledged to help the country identify and eliminate areas of corruption, following a series of corruption allegations concerning government officials.

March / April 2000
Tripartite Meeting with Greece and Turkey Boosts Regional Cooperation
At the invitation of their Bulgarian counterpart, the foreign ministers of Bulgaria, Greece, and Turkey met in early March in the Bulgarian city of Plovdiv to map out a common regional security policy. They also traveled to the Greek town of Orestiada and the Turkish town of Edirne, both along the Greek-Turkish border, as their talks continued later in the day. This was the first exclusive meeting of the three countries’ foreign ministers since World War II.

Nadezhda Mihailova of Bulgaria, George Papandreou of Greece, and Ismail Cem of Turkey focused on promoting the Stability Pact for Southeastern Europe, developing economic cooperation, establishing joint infrastructure projects, dealing with visa issues, and combating crime, corruption, and regional terrorism. They also pledged to work toward normalization of the situation in Kosovo, supporting the participation of the private sector in the reconstruction process.

Both Papandreou and Cem reiterated their countries’ strong support for Bulgaria’s entry into NATO.

February 2000
Trans-Balkan Pipeline Enhances Regional Grid
Washington has renewed its interest in a proposal to construct a trans-Balkan pipeline from the Bulgarian Black Sea port of Burgas to the Albanian Adriatic port of Vlore. This interest is consistent with its policy of supporting the emergence of multiple pipelines to transport oil from the Caspian basin to the West and complements its stated commitment to the proposed Baku-Ceyhan pipeline.
U.S. interest in the trans-Balkan project was revived during a January meeting of international oil investors, the Export-Import Bank of the United States, the European Bank for Reconstruction and Development, the World Bank, and the U.S.-based Albanian-Macedonian-Bulgarian Oil Company (AMBO). Tankers would pick up oil from the eastern Black Sea terminals in Russia and Georgia, and transport it to Burgas for shipment directly to Western Europe. A panel of experts is meeting in March to discuss a $980,000 feasibility study for the project. The U.S. will pay $588,000 of the cost of the study, and AMBO will contribute the remaining $392,000.

February 2000
U.S., Greek Firms to Help Monitor Oil Transport

The U.S. armament company Lockheed-Martin and the Greek communications firm Intracom have jointly proposed that Bulgaria be one of five countries involved in a project they are spearheading to ensure the safe passage of oil from the Caspian basin to Europe through a regional radar network. The other countries are Georgia, Greece, Romania, and Turkey.

Bulgaria will become a key player in the transport of oil to Western markets if pipelines are constructed from Burgas to Vlore and to the Greek Aegean port of Alexandroupolis to help alleviate oil tanker traffic through the Bosporus.

Sofia is being invited to embark on a joint venture with Lockheed-Martin and Intracom to carry out the construction of two radar stations in Bulgaria through the participation of Bulgarian subcontractors. The government is expected to use the information gathered to facilitate rescue operations in the Black Sea, aid the monitoring of aircraft accidents and hijackings, and enhance the country’s telecommunications network. The data will also help Sofia counteract maritime smuggling activity, including heroin trafficking from Asia to Western Europe and North America via Bulgaria, which should increase this year because of a larger opium poppy crop in Asia.

Greece will become part of the radar network this year and has arranged EU financing for the project. Lockheed-Martin will be handling implementation of the project in Turkey and has already supplied Romania with a radar station, which is being erected near its Black Sea port of Constanta. The company is also drafting proposals for stations in Georgia.

February 2000
Second Danube Bridge to Expand Romania Trade

Bulgaria and Romania, both candidates for European Union membership, have agreed on a location for a second bridge across the Danube River during talks sponsored by the EU, which views regional cooperation as a condition for membership.

The agreement ends a six-year discussion concerning the bridge, which will handle traffic that now relies on the one existing bridge along a 300-mile stretch of the river. Resolution of the issue was carried out within the framework of the Stability Pact for Southeastern Europe, a forum for regional development created after the Kosovo war.

Romania gave its assent for the bridge on the condition that Bulgaria secures the financing for the $188 million project and agrees to no longer obstruct the export of Romanian electricity to Greece. The European Investment Bank will finance half of the construction and will seek donors for the rest of the funding.

February 2000
Multinational Task Force Steps Up Preparations

The Turkish commander of the seven-nation multinational force, the Southeast European Brigade (SEEBRIG), carried out his first inspection of a brigade troop unit since assuming his position in September 1999, when the force’s initial rotating headquarters was inaugurated in the south-central Bulgarian city of Plovdiv.

Brigadier General Hilmi Akin Zorlu watched servicemen of a Bulgarian unit man an observation point and a road block as part of the training given each unit in the force. The countries contributing to the force, in addition to Bulgaria, are Albania, Greece, F.Y.R. Macedonia, Italy, Romania, and Turkey.

The commander is expecting SEEBRIG to be operational by the end of 2000. The agreement establishing the 4,000-member brigade was signed in Skopje in September 1998. Plovdiv will remain the headquarters until 2003. The positions of chairman of the Politico-Military Steering Committee, currently held by Greece, and commander will also rotate among the member countries.

February 2000
Reforms Bring Continued Economic Progress

The International Monetary Fund (IMF) predicted that the Bulgarian economy would enter a solid recovery period this year with an anticipated 4 percent growth rate, up from an expected 2.5 percent in 1999. The projected annual inflation rate for this year is 2.8 percent, down from 6.2 percent last year.

Bulgaria is halfway through an $850 million accord with the IMF signed in September 1998. Based on its progress on reform, the country will receive its seventh $72 million allocation in March under a three-year loan from the IMF.

January 2000
Political, Economic Reforms for EU Accession Begin
Bulgaria is one of six countries that will begin negotiations in February on membership in the European Union as part of the most ambitious move toward enlargement in the bloc’s 42-year history. Bulgaria’s inclusion in the group was seen partially as a political reward by European Union countries for its backing of NATO’s campaign against Yugoslavia over Kosovo.

A decision was made at the December EU summit in Helsinki to open talks with Bulgaria, Romania, Latvia, Lithuania, Slovakia, and Malta, which were designated as candidates in December 1997. The European Union is already conducting accession negotiations with Poland, the Czech Republic, Hungary, Estonia, Slovenia, and Cyprus.

Prime Minister Ivan Kostov has carried out a radical reshuffling of his cabinet, removing 10 of the 16 ministers, and has created a new economics ministry to accelerate the tough reforms required for European Union accession. Meeting the bloc’s financial benchmarks will be an arduous task for Bulgaria, with its $740 million trade gap as a result of the Kosovo crisis, its billion-dollar annual debt payments, and its low per capita income, one of the lowest of the European Union aspirant states.

Financial stability is ensured, however, through an IMF-backed currency board system established over two years ago. The United States has launched a $4 million program to help Bulgarian towns along the Danube River, where debris from bridges bombed during the Kosovo conflict still blocks commerce along the waterway.

Greater transparency in business transactions and a reduction in administrative holdups will be sought to attract foreign investors in a nation with the lowest level of foreign investment in the region. Selling off state utility monopolies as part of privatization requirements, restructuring the health and pension systems, cracking down on the country’s black economy, and tackling rampant corruption will also be the focus of pre-accession reforms.

A Council of Europe monitoring team said Bulgaria’s human rights record was not up to EU standards. Needed reforms include integrating the Roma (Gypsy) population into society and appointing their representatives to local and federal government positions.

December 1999
U.S. Praises Support for Kosovo War, Economic Reforms
President Clinton, the first sitting U.S. president to visit Bulgaria, offered encouraging words for Sofia’s bid to join NATO as he addressed a crowd of 15,000 in a square in the capital during a 10-day trip through southeastern Europe that also included Turkey, Greece, Italy, and Kosovo. Bulgaria is expected to be named a candidate for NATO membership in the alliance’s next round of the enlargement process in 2001. The European Commission has recommended that EU leaders, who meet in Helsinki December 10-11 for a summit, invite Bulgaria and five other countries to join the six states already holding membership talks with the bloc.

Clinton thanked Bulgaria for supporting NATO’s air war over Kosovo by permitting allied warplanes to fly over its territory. Bulgaria is also supporting U.N. sanctions against Yugoslavia, despite the strain on its already weak economy. Washington will provide a $25 million grant to Sofia by the end of 1999 to offset the financial consequences of the war. Clinton also announced several other programs to boost Bulgaria’s economy and encourage U.S. companies to conduct business in the country.

The president praised the pro-market reforms implemented by President Petar Stoyanov and Prime Minister Ivan Kostov since they defeated ex-communists in a 1997 election after six years of economic stagnation. He appealed to the people of neighboring Serbia to follow Sofia’s democratic model.

Prior to Clinton’s visit, Commerce Secretary William Daley hosted a two-day business conference in Sofia to promote U.S. involvement in Balkan reconstruction. He was accompanied by 100 American businessmen from enterprises dealing with financial services, telecommunications, energy, and construction, who met with officials from six Balkan countries, in addition to Kosovo and Montenegro.

December 1999
Danube River Blockage Hinders Regional Commerce

Bulgaria’s economy has been hit hard by lost and re-routed trade caused by the blockage of the Danube River in Serbia by bridges that were bombed by NATO planes. Land trade routes through Serbia, used by Bulgaria before the war, have also been closed to Sofia because of Bulgaria’s decision to support the air campaign.

Losses to Bulgaria from suspended or altered trade activity since the beginning of the NATO campaign in March have reached about $150 million, a significant drain on a country with a gross domestic product of $39.9 billion. The state shipping company has laid off 500 employees, and the current account deficit is expected to be $600 million for 1999.

The delay in clearing the bridge debris stems from a stand-off between Yugoslav President Slobodan Milosevic and the West over whose responsibility it is to carry out the task. Milosevic insists that he will only allow the debris to be cleared away if the international community pays between $15.7 million and $31.5 million to remove the rubble and agrees to rebuild the bridges. The United States and the EU have agreed to contribute some $20 million to the removal effort but will not provide the funding while Milosevic is in power. Analysts say the need to clear the river might lead some European countries to break the economic embargo against Yugoslavia.

October 1999 - November 1999
Regional Peacekeeping Brigade is Activated
In September, the fully staffed headquarters of the Southeast European Brigade (SEEBRIG), a seven-nation Balkan force, was inaugurated in Plovdivits base for the first four years. The 5,000 force, comprised of troops from Albania, Bulgaria, F.Y.R. Macedonia, Greece, Italy, Romania, and Turkey, will take on regional peacekeeping or humanitarian operations under the umbrella of international bodies, including the United Nations, Western European Union, Organization for Security and Cooperation in Europe (OSCE), and NATO.

The brigade's headquarters, as well as the commander and the leader of the military-political committee, will rotate among member countries. Turkey is leading the force for the first two years, while Greece is heading its military-political committee initially in an office in Athens. Slovenia and the U.S. are participating in the force as observers. The first command post exercise will be conducted in December in Plovdiv.

At the ceremony opening the headquarters, Greek Defense Minister Akis Tsohatzopoulos and his Turkish counterpart Sabahattin Cakmakoglu underscored the support in Greece and Turkey for the development of closer bilateral relations. They said the earthquakes that struck both countries within a three-week period in August and September had created unique conditions for this strengthened cooperation. (See "A Politico-Military Success in the Balkans," by Adm. T. Joseph Lopez, in the October/November 1998 issue of the Strategic Regional Report.)

October 1999 - November 1999
U.S. Aid Spurs Security, Economic Ties

Washington and Sofia have agreed that Bulgaria will provide supplies for U.S. troops on training maneuvers or in Partnership for Peace exercises in the region, including food, water, fuel, communication and transport services, housing, storage facilities, and emergency repairs. Similar agreements have been signed with F.Y.R. Macedonia, as well as countries in eastern Europe and the Baltic region. Although Bulgarian President Petar Stoyanov stated that he would support the establishment of U.S. bases in Bulgaria as an important component of Sofia's NATO membership aspirations, no such negotiations are under way.

The Bulgarian government is to receive a $25 million grant from the U.S. Agency for International Development (USAID) by the end of the year to help offset the country's economic losses resulting from the Kosovo crisis. This assistance is in addition to USAID's expected $28 million funding next year to help the country accelerate economic and political reform.

June 1999 - July 1999
New Trans-Balkan Pipeline Study Alters Regional Energy Grid
The United States Trade and Development Agency announced in June that it would award Bulgaria a $566,000 grant to conduct a feasibility study on the construction of an oil pipeline running from the Bulgarian Black Sea port of Burgas, through F.Y.R. Macedonia, and on to the Albanian Adriatic port of Vlore. The U.S. company AMBO will provide the remaining funds for the study estimated to be a total of $980,000.

The projected completion date for the 563-mile pipeline would be 2002, and it would have the capacity to transport 750,000 barrels of Caspian Sea oil daily to western Europe. The oil would be shipped to Burgas by tanker from the Black Sea ports of Novorossiysk in Russia and Supsa in Georgia.

Analysts view Washington’s interest in this pipeline as part of a Balkan economic stabilization plan following the Kosovo crisis, which might undermine Ankara’s chances of building a pipeline for Caspian oil from the Azerbaijani port of Baku to the Turkish port of Ceyhan. The Turkish pipeline was initially promoted by the U.S. government before plummeting oil prices and lower-than-anticipated Caspian production made it less feasible economically. U.S. government officials insist that Washington’s backing of a Burgas-Vlore pipeline route has not diminished its commitment to the construction of the Baku-Ceyhan pipeline.

The proposed trans-Balkan pipeline would traverse regions with an uncertain political future, raising the possibility of civil war or minority uprisings, as would the Baku-Ceyhan pipeline, which would transit areas affected by the Kurdish guerrillas and the Azerbaijan-Armenia dispute over Nagorno-Karabakh. The terrain along the Burgas-Vlore route is also quite mountainous, a factor which could raise construction costs.

A 185-mile pipeline for Caspian oil is being planned from Burgas to Greece’s Aegean port of Alexandroupolis, with a capacity of 800,000 barrels a day. A 114-mile pipeline could also be constructed in eastern Thrace from Kiyikoy on Turkey’s Black Sea coast to Turkey’s Aegean port of Ibrikbana, with a capacity of 1 million barrels a day.

The Burgas-Vlore, Burgas-Alexandroupolis, and Kiyikoy-Ibrikbana pipelines would all relieve tanker traffic through the over-utilized Bosporus and reduce the potential for an environmental disaster. Construction of the latter two pipelines would have the added advantage of promoting improved relations between Greece and Turkey as the countries worked together to provide safe passage for Caspian oil through the Aegean.

June 1999 - July 1999
Brugas-Alexandroupolis Project Advances
Bulgarian, Greek, and Russian government ministers will meet in Moscow in July to finalize legal arrangements for the formation of the Trans-Balkan Pipeline Company, which will build and operate the proposed Burgas-Alexandroupolis pipeline.

Greece plans to obtain part of its funding for the project from the European Union. An initial agreement for the construction of the $600 million pipeline was signed by Bulgaria, Greece, and Russia in 1994. It will carry an estimated 10 to 12 million tons of crude a year in the first year of operation, rising to 20 million in later stages.

June 1999 - July 1999
Kosovo Crisis Hits Economy
The Kosovo crisis has had a significant impact on the Bulgarian economy. The country’s projected growth rate for 1999 is expected to fall from 4 percent to 2 percent, and foreign direct investment has been affected.

Direct losses of $73 million were incurred as a result of halted trade with Yugoslavia, primarily in the areas of transportation, industry, agriculture, and energy. In addition, interrupted commercial ties with western Europe resulted in indirect losses of over $300 million. Finding alternate routes for exports normally sent through Yugoslavia, at a markedly higher cost, resulted in the loss of some markets. In contrast, the tourist industry was not affected during the months the war in Yugoslavia was taking place, with the number of visitors to Black Sea resorts up 23 percent over the same period in 1998.

April 1999 - May 1999
Airspace Available for NATO Operations
The Bulgarian government has opened its airspace to NATO aircraft for the purpose of conducting airstrikes against Belgrade, in exchange for security guarantees from the alliance. In doing so, Bulgaria joins non-NATO members Romania and Slovenia, which have already opened their airspace to NATO planes involved in the conflict.

The move is opposed by a majority of Bulgarians, who fear being caught in the war’s crossfire or drawn into the conflict. A poll indicates that up to 55 percent of Bulgarians, who are sympathetic to their fellow Slavs and Orthodox Christians in Yugoslavia, are opposed to NATO’s air campaign, although 70 percent of the Bulgarian people are in favor of joining the alliance. In non-violent demonstrations outside the parliament during the debate on the airspace issue, some 10,000 demonstrators who supported the government’s pro-NATO stance outnumbered the 2,000 anti-NATO protestors.

The Bulgarian government, which views NATO membership as the only guarantee for its security in the region, has banned industrial exports of oil to Yugoslavia and has backed the oil embargo against Belgrade to help end the war. In early May, Bulgaria closed its border with Yugoslavia to rule out the transport of fuel supplies into the country.

April 1999 - May 1999
Stray Missiles Heighten Defense Concerns
Prime Minister Ivan Kostov in late April urged NATO to work closely with Bulgaria to prevent stray alliance missiles from hitting Bulgarian territory. The appeal was made after a NATO rocket intended for a target in Yugoslavia had gone off course damaging a house in a suburb of Sofia, 30 miles from the Yugoslav border, but causing no injuries. Three other missiles had hit Bulgaria without causing damage since NATO airstrikes began.

Kostov urged NATO to supply Bulgaria with radar that would enable its air defenses to distinguish between NATO and Yugoslav planes, and suggested that an electronic system was needed along the border to allow better orientation of allied pilots. On a visit to Sofia in May, NATO Supreme Commander Gen. Wesley Clark said the alliance would address these issues immediately.

April 1999 - May 1999
Support for Refugees in F.Y.R Macedonia
Bulgaria has provided humanitarian aid to F.Y.R. Macedonia to help alleviate the refugee crisis there, rather than taking in refugees. Its assistance has included providing a field hospital, 100 field kitchens, and prefabricated wooden houses worth about $5 million, which can accommodate up to 3,000 people. In addition, at least 400 of the seriously ill refugees have been taken to Bulgaria for medical care. Bulgaria has also facilitated the transit of more than 1,700 refugees through its territory to Turkey. About 160 people from Serbia have applied for refugee status in Bulgaria.

April 1999 - May 1999
Economic Troubles Loom from War's Impact
With three-quarters of its exports to Europe transported by truck through Serbia or via the Danube River, which is blocked by rubble from bridges destroyed in the airstrikes, Bulgaria will likely suffer considerable economic losses as a result of the NATO campaign. An estimated $260 million a month could be lost as a result of declining exports, rising freight costs, and cancelled contracts in a country that was expecting $1 billion in foreign investment this year.

In April, a group of 24 industrial countries established to support eastern Europe after the fall of Communism pledged $275 million in balance of payments assistance for Bulgaria in 1999, with $100 million being the direct result of the Kosovo conflict. The commitment was in addition to the $440 million promised by the World Bank and the IMF for balance of payments support this year.

February 1999 - March 1999
U.S. Assists Military in Preparing for NATO
The United States is helping Bulgaria set a timetable for the reform of its military in preparation for potential NATO membership. A five-month Joint Defense Reform Study has been initiated to focus primarily on personnel reform, including increasing the number of career non-commissioned officers to serve as technical experts on major weapons systems, and on achieving NATO interoperability. The U.S. advisors are expected to recommend that Sofia avoid major purchases, such as main battle tanks and fighter aircraft, until basic restructuring of the military ensures that the infrastructure exists to operate such weaponry. The study grew out of a request last year by the Bulgarian government for Washington’s assistance in preparing the country to be a candidate for the alliance. The U.S. is working with other regional allies in this effort.

February 1999 - March 1999
NATO Bid Gets Turkish Support
Turkish President Suleyman Demirel told Bulgarian officials in March that Ankara backed Bulgaria’s bid to join NATO. During a visit to Sofia, Demirel said Turkey would work to promote the candidacy of both Bulgaria and Romania for NATO membership during the NATO summit in Washington in April.

Bulgaria, worried about the Kosovo crisis in neighboring Yugoslavia, has accelerated its efforts to join the alliance. It has angered Belgrade by saying that it would allow NATO aircraft to use its airspace for air strikes by the alliance against Serbia.

A delegation of leading Turkish businessmen accompanied Demirel to Sofia to discuss the possibility of new joint ventures between the two countries. There are about 2,000 Turkish firms in Bulgaria, and Turkey invested $23 million in the country last year. Ankara is seeking to double Bulgaria’s electricity exports to Turkey by 2001.

February 1999 - March 1999
Relations with F.Y.R. Macedonia Normalize, Cooperation Expands
Sofia and Skopje have solved a language dispute that has impeded full political and economic cooperation between the two neighboring countries. The dispute has been over Bulgaria’s insistence that the language spoken in F.Y.R. Macedonia is a Bulgarian dialect, rather than a separate language. In February, the problem was overcome when F.Y.R. Macedonia Prime Minister Ljubco Georgievski and Bulgarian Prime Minister Ivan Kostov signed a declaration in Sofia referring to the countries’ two official languages.

The prime ministers also signed seven economic accords accompanied by a Bulgarian gift of 150 tanks and a similar number of artillery pieces, worth $3.5 million. The weaponry was decommissioned from the Bulgarian Army as part of its reform process. The accords include measures to expand trade cooperation and protect investments. The countries are expected to conclude an agreement establishing a free economic zone next year. Bilateral trade fell from $602.3 million in 1995 to $96 million the first nine months of 1998.

The victory of Georgievski’s center-right coalition in parliamentary elections last November, ending 53 years of leftist rule, is believed to have contributed to the resolution of the countries’ linguistic dispute. Bulgaria was the first country to recognize F.Y.R. Macedonia’s independence after it broke away from the Yugoslav federation in 1991.

February 1999 - March 1999
Central Location for Region's Peacekeeping Force
The Bulgarian city of Plovdiv will serve as the headquarters of the seven-nation Southeast European Brigade (SEEBRIG) for the first four years. This 5,000 Balkan peacekeeping force was created in September to promote regional security. (See Greece Section, Defense Officials Meet to Finalize Peacekeeping Force, page10.)

From a military perspective, Plovdiv's location, central to member countries Greece, Italy, Turkey, Albania, Bulgaria, the Former Yugoslav Republic of Macedonia (F.Y.R.O.M.), and Romania, is ideal for conducting training and coordinating deployment to any Balkan location. However, the selection of Plovdiv also provides political benefits to Bulgaria. Sofia is eager to consolidate its Western institutions, and NATO membership is one of its more important and immediate objectives. While SEEBRIG is not a NATO initiative per se, Greece, Italy, and Turkey belong to the alliance. In addition, the brigade will use some NATO procedures and will probably maintain a loose association with the alliance.

February 1999 - March 1999
Closer Defense Cooperation with Turkey Underway
Reflecting the development of closer ties between the defense sectors of Bulgaria and Turkey, Turkish Chief of General Staff Huseyin Kivrikoglu visited Bulgaria in January to discuss Sofia's bid to join NATO and cooperation between the two countries' militaries within the framework of SEEBRIG. Kivrikoglu said he was pleased that Plovdiv had been chosen to serve as SEEBRIG's first headquarters. He expressed the hope that a similar kind of force, bringing together the navies of various countries, could be established in the Black Sea region. The general noted that cooperation between the Bulgarian and Turkish militaries at Plovdiv would strengthen bilateral relations and enhance peace and stability in the region.

Turkey has expressed an interest in exploring prospects for participation in the privatization of Bulgaria's defense industry. In November, then Turkish defense minister Ismet Sezgin announced during a trip to Sofia that Ankara was willing to contribute to the modernization of the Bulgarian Army to bring it in line with NATO standards.

October 1998 - November 1998
Region's Natural Gas Network To Expand
Bulgargas, the owner and operator of Bulgaria’s natural gas system, will invest $400 million up to the year 2001 to widen its network of transit pipelines in order to meet demands for increased Russian natural gas supplies to Balkan countries. This year, Bulgaria will transit about 10 billion cubic meters (bcm) to Greece, F.Y.R.O.M., and Turkey. By 2010, total transit volumes to these countries and Yugoslavia will rise to 18.7 bcm. The pipeline to Yugoslavia will be constructed after 2000 and will supply it with 1.6 bcm a year. Turkey’s gas supply from Bulgaria will increase from 8 bcm this year to 14 bcm annually after 2002.

October 1998 - November 1998
Economic Turnaround Aims at EU Membership
Bulgaria’s economy has made impressive progress since Prime Minister Ivan Kostov took office in May 1997 amid an unprecedented economic crisis. Last year’s adoption of a currency board regime, backed by the International Monetary Fund (IMF), has played an important role in the country’s economic upturn. By pegging the Bulgarian lev to the Deutsche mark, the regime has contributed to Sofia’s goal of bringing the economy in line with other central European economies in order to qualify by 2001 as a candidate for membership in the European Union.

The country has had a boost from the IMF with its September approval of a three-year $840 million loan agreement to support the balance of payments deficit and market reforms. Growth in gross domestic product is projected at about 4 percent this year, the highest in the Balkan region, and the year-end inflation rate is expected to be 9 percent. Foreign investment and privatization are areas that need to be targeted. Greece’s OTE telecommunications group is expected to bid on the planned sale of a 51 percent stake of the Bulgarian Telecommunications Company. In November, OTE acquired a 35 percent share of the Romanian telecommunications company Rom Telecom and will take over management of the company.

August 1998 - September 1998
Measures to Curb Cross-Border Crime, Drug Trafficking
Sofia introduced measures in late July to combat an increase in conventional, organized, and cross-border crime that threatens the government’s authority and jeopardizes the implementation of economic reforms. The government established a special police unit to curb money laundering, imposed regulations on monitoring the financial transactions of state employees, and toughened legislation concerning related penalties and court proceedings. Bulgaria’s anti-crime program was launched as the government was concluding a three-year loan package with the International Monetary Fund, which will provide balance of payments support, accelerate structural reforms, and increase foreign investment interest in the country.

Grappling with Bulgaria’s strategic location on the narcotics smuggling route from Pakistan, Afghanistan, and Iran to Western Europe, the government earlier in the month agreed to participate in a cooperative effort with the European Union and the U.N. that will step up the fight against drug trafficking in southeastern Europe. Romania and F.Y.R.O.M. will also participate in the two-year$7.5 million project, which will upgrade border checkpoints and customs offices and train narcotics inspection teams.

August 1998 - September 1998
U.S.-Greek Bank Acquistion Furthers Privitization
In a joint venture, a U.S. and a Greek company have paid the Bulgarian government $38 million for the purchase of about 78 percent of one of Bulgaria’s largest state-owned banks. The purchase of Post Bank was made by a unit of American International Group (AIG), a large insurance company, and Greece’s Consolidated Eurofinance Holdings. The transaction was a key element of Bulgaria’s plans for privatization under funding agreements with international lenders.

August 1998 - September 1998
Tripartite Cooperation with Turkey and Romania Expands
The prime ministers of Bulgaria, Turkey, and Romania announced in July during a meeting in Sofia that they would institutionalize their trilateral meetings to further cooperation among the countries. Ivan Kostov of Bulgaria, Mesut Yilmaz of Turkey, and Radu Vasile of Romania agreed to boost three-way trade to offset possible losses resulting from sanctions imposed against Yugoslavia. They also discussed cooperative efforts to combat organized crime and drug trafficking, the establishment of joint infrastructure projects, and the creation of a regional peacekeeping force that could support NATO or Western European Union (WEU) peacekeeping efforts in the region. Yilmaz stated that Turkey would work to advance the candidacies of Bulgaria and Romania for NATO membership. In January, Bulgaria will join the Central European Free Trade Agreement (CEFTA), which also includes Romania.

August 1998 - September 1998
Energy Accord, Free-Trade Agreement with Turkey
With Turkey’s electricity consumption rising 10 percent each year, Sofia and Ankara have been negotiating an agreement on supplying Bulgarian electric power to Turkey up to the year 2010. In July, Turkey offered to invest a total of $100 million in the establishment of joint ventures to construct a hydro-electric facility in the Rhodope Mountains of southern Bulgaria and a section of the Maritsa highway linking Sofia with the Turkish border.

Also in July, the two countries signed an agreement setting up a free economic zone, beginning January 1. It will gradually reduce tariffs on goods exchanged up to the year 2002, when all tariffs will be abolished on industrial goods. Quotas will be set for agricultural products, on which lower tariffs will be levied. Last year’s two-way trade totaled $540 million, with $440 million in Bulgarian exports and $100 million in Turkish exports.

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
  • Kristina N. Terzieva // Program Assistant
  • Emily R. Buss // Program Assistant