After the collapse of the socialist government of Zhan Videnov, the caretaker government, headed by Stefan Sofianski managed to calm down the social and political situation in Bulgaria, gaining back the trust of the international institutions. On 19 April 1997 the coalition of parties, united by the Union of Democratic Forces won convincingly the early parliamentary polls, receiving the absolute majority in Parliament. Here is what Union of Democratic Forces (UDF) leader Ivan Kostov said at a meeting in front of thousands, gathered to celebrate the election victory of the democratic forces:

“We promised the Bulgarian Day of St. Lazarus to turn into a Bulgarian Easter. The main thing is that we have risen again, looking at the future with hope. That is why the young are with us. They want future, they want goodness, welfare and hope, they want confidence in their own strength. They reject hatred. They want to believe, to know that they can, to have self-confidence. That was why they followed our path – because we gave this to them. The major fight for us now within the power is the fight for Bulgaria. The terrific size of corruption is not a secret to anyone here. Banks have been burgled, financial pyramids were built up and many other traps, targeting the savings of the average person. Our country is in the hands of mobsters, of organized crime. We know that the only way to restore the authority of the state institutions is to gain back the respect towards the state and its bodies. We must convince the Bulgarian citizens that we can provide security, but freedom at the same time, protecting their rights.”

The initial quick and effective measures of the UDF government gained the respect of the mobster insurance companies and security guards, ceasing the everyday racketeering and the fear. The campaign promises began to turn into reality as urgent structural reforms. They aim at the reduction of budget deficit, lowered inflation rates and the attraction of foreign investors. The Currency Board, implemented by the Kostov cabinet in Bulgaria also contributed. A three-year-long agreement with the International Monetary Fund was signed, which gave a chance to Bulgaria to receive fresh money, aiming those at economic investments.

The foreign policy did follow the direction that should lead Bulgaria along the road of its NATO and EU membership. Thus in 1999 the state received an invitation and a roadmap for its EU accession and in the end of the government’s mandate – in 2001, the visas for the trips of the Bulgarians to the EU dropped.

The balance of President Petar Stoyanov after the first year of the UDF governing outlined exactly the return of the country’s international prestige.

“I think that the major success of the government over this one year was the returned trust of the world towards Bulgaria. That was due precisely to the financial and macroeconomic stabilization. That has turned Bulgaria into a state that requires a serious attitude in its international relations, being now a serious and trustful partner. The government should continue to struggle persistently for three main things from now on: the first thing is the establishment of a better business climate for the attraction of foreign investments, and strategic ones above all. The second thing is a much more decisive and transparent privatization. The third moment is in the European attitude, particularly European tax policy for small and medium-sized business, as I am convinced that the success of this business will become the backbone of the future Bulgarian economy.”

The government and PM Ivan Kostov also took their first and independent foreign policy steps, headed mostly by Bulgaria’s national interests. In March 1999 11 NATO member-states started a military operation in Kosovo, aiming to cease the ethnic cleansing there, started by the Milošević regime. On April 28 that same year Bulgaria and NATO signed an agreement, allowing the alliance’s airplanes to fly across this country’s air space. However, they didn’t have the right to take off from Bulgarian airports due to Bulgaria’s declared neutrality. At the same time the government refused to provide an air corridor to Russian planes, willing to perform landing in Serbia and didn’t accept refugees from the Kosovo conflict despite the pressure of the West.

The government managed to defend the national interest over that critical period, when there was a war along the western borders of the country and the latter stood away from military actions.

Privatization was the main accent in the policy of the governing coalition. The government of Ivan Kostov began to sell and liquidate the state owned enterprises that registered losses.

“As far as privatization is concerned… I said that the time of the delay was used to privatize the privatization. In order for the cash privatization of all major companies to be assigned to a respectful international mediator – an investment bank or companies with really solid stances on the global economic and financial markets, which could find the best strategic investors for the Bulgarian enterprises.”

However, not the cash, but the worker-management privatization was the thing that made the UDF electorate hesitate, as many companies fell into the hands of the former communist leaders and oligarchs related to them. People, close to the blue government also benefited.

The law gave privileges to the worker-management companies – for instance, to pay only 10 percent of the sum in cash money and the other 90 percent‘s repayment to be allowed by installments. Thus some of the most scandalous privatization deals in Bulgaria were contracted becoming emblematic for the burglar of public wealth and assets in the shady period of Bulgarian transition.

That privatization was one of the reasons why the UDF lost the 2001 parliamentary elections, along with the unpopular measures taken after the Videnov government. Many social groups were affected before the effect of the reforms could be felt, the unemployment rate reached 20 percent. The unity of the UDF also cracked, as the president demanded from the premier to take a stance away from corruption within the executive power. Despite its mistakes the government of the UDF remained as one of the most successful cabinets in the history of the Bulgarian transition period, as the road to EU membership through membership in NATO was opened. The state was turned by Kostov into a reliable and predictable partner, which stabilized its future for many years to come.

English version: Zhivko Stanchev