wh y w e l o s t
18
reminiscent in scale of the gatherings in neighboring Belgrade, and also of the 1990 Bulgar-
ian “Velvet Revolution.” Days of mass protests around the country followed. The protests
started from Sofia, but this time they spread all over the country. The arrogant behavior of
the Socialists in January brought even more frustration. After the resignation of Prime Min-
ister Videnov, the Socialist majority in parliament decided to elect a new BSP government.
The discontent of the citizens exploded. Massive daily demonstrations paralyzed the capital
and all major cities. All the nation’s major cities and villages, as well as major points and
routes, were barricaded and manned by determined citizens. The demand was simple – no
more Socialist governments, and early elections as soon as possible.
On 4 February in front of the Alexander Nevski Cathedral in Sofia at a huge rally of the
opposition, the leader of the UDF and future prime minister, Ivan Kostov, announced that
BSP had agreed to call elections for April. For the next two months, a caretaker cabinet,
headed by the UDF mayor of Sofia, Stefan Sofianski, was appointed by newly elected Presi-
dent Stoyanov. These early elections confirmed the decisive change of mood in the nation.
For the first time since 1989, an overwhelming majority of Bulgarians was prepared to
admit the necessity of the painful reforms necessary to make a clean break from their
Communist past.
IV. THE ALLIED DEMOCRATIC FORCES IN POWER
(1997-2001)
While the UDF-led government inherited an economic collapse and political institutions in
chaos, its vision and political discipline instilled confidence in the Bulgarian people and im-
pressed international institutions. Cementing a parliamentary coalition of like-minded par-
ties, the ADF achieved full control of parliament and attacked Bulgaria’s nagging problems.
With the backing of the IMF and other international financial institutions, the new cen-
ter-right government introduced macroeconomic stabilization measures and structural
reforms that resulted in a reduced budget deficit, lower inflation and a rise in foreign
investment. The introduction in July 1997 of a currency board swiftly pushed down Bul-
garia’s soaring inflation rates and continues to contribute to financial stability. Bulgaria’s
GDP declined by over 10% in 1996 and by 7% in 1997. It rebounded with 3.5% growth in
1998.
After stabilizing the economy with a currency board that imposed strict monetary poli-
cies and financial transparency, the government accelerated the sluggish privatization of
state-owned assets. To boost economic growth, the UDF launched land, tax, financial and
judicial reform efforts that created a privatization environment open to foreign invest-
ments. Ambitious energy and transportation infrastructure improvements – a necessity
after years of the Communist neglect – were started, and the government began consider-
ing Bulgaria as a possible regional hub of commerce and energy exports for the future.
Prime Minister Kostov declared that the fight against organized crime was a priority. The
National Assembly passed laws to amend the Penal Code and the Criminal Procedures
Code. The government succeeded in cracking down on organized crime involved in illicit
oil, gas and arms trafficking.
