Background Note: Bulgaria

Background Note: Bulgaria

April 2009

Bureau of European and Eurasian Affairs

PROFILE

OFFICIAL NAME:
Republic of Bulgaria

Geography
Area: 110,910 sq. km. (slightly larger than Tennessee).
Major cities: Capital--Sofia 1.2 million.
Others: Plovdiv--368,568, Varna--349,482.
Terrain: Bulgaria is located in South Central Europe. The terrain is varied, containing large mountainous areas, fertile valleys, plains and a coastline along the Black Sea.
Climate: Continental--mild summers and cold, snowy winters.

People
Population (2008): 7,606,551.
Growth rate (2008): -0.43%.
Ethnic groups (2001): Bulgarian 83.94%, Turkish 9.42%, Roma 4.68%, and other 2% (including Macedonian, Armenian, Tatar, Circassian).
Religions (2001): Bulgarian Orthodox 82.6%, Muslim 12.2%, Roman Catholic 0.6%, Protestant 0.5%, others.
Language: Bulgarian 84.5%, other 15.5%.
Health: Life expectancy (2008)--male 69.5 years; female 76.6 years. Infant mortality rate (2008)--8.6 deaths/1,000 live births.
Work force (2008 est.): 4.806 million. Agriculture--11%; industry--32.7%; services--32% (3rd qtr. 2004 est.).

Government
Type: Parliamentary democracy.
Constitution: Adopted July 12, 1991.
Independence: 1908 (from the Ottoman Empire).
Branches: Executive--president (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--unicameral National Assembly or Narodno Subranie--240 seats. Members are elected by popular vote of party/coalition lists of candidates for 4-year terms. As of July 2008, seat allocation was as follows: CfB--81, NMSS--35, MRF--34, UDF--15, DSB--16, BND--16, BPU--14, Ataka--11, and independents--18. Judicial--three-tiered system.
Administrative divisions: 28 provinces plus the capital region of Sofia.
Suffrage: Universal at 18 years of age.
Main political parties: Coalition of Bulgaria or CfB (coalition of parties dominated by BSP); Bulgarian Socialist Party (BSP); National Movement Simeon II (NMSS); Movement for Rights and Freedoms (MRF); United Democratic Forces (UDF); Democrats for Strong Bulgaria (DSB); Bulgarian Peoples Union (BPU); Bulgarian New Democracy or BND (a parliamentary group formed by NMSS defectors); Attack Coalition (ATAKA); and Citizens for the European Development of Bulgaria (GERB). Results from the June 25, 2005 general election were as follows: CfB 31.1%, NMSS 19.9%, MRF 12.7%, ATAKA 8.2%, UDF 7.7%, DSB 6.5%, BPU 5.2%.

Economy
GDP (2008 est.): $49.8 billion.
Real GDP growth: 6.0% (2008); 6.2% (2007); 6.3% (2006); 6.2% (2005); 6.6% (2004); 5.0% (2003).
Per capita GDP (PPP, 2007 est.): $11,300.
Inflation rate: 7.8% (2008); 12.5% (2007); 6.5% (2006); 5% (2005); 6% (2004); 5.6% (2003).
Unemployment rate: 5.6% (2008); 7.7% (2007 average); 6.62% (November 2007); 9.61% (2006 average); 11.5% (2005); 12.7% (2004 average); 14.25% (2003 average).
Natural resources: Bauxite, copper, lead, zinc, coal, and timber.
Official exchange rate: Lev per $1 U.S.=1.34 (2008); 1.42 (2007 average); 1.56 (2006 average); 1.57 (2005 average); 1.58 (2004 average); 1.73 (2003 average).

GEOGRAPHY AND PEOPLE
Bulgaria shares a border with Turkey and Greece to the south, Macedonia and Serbia to the west, Romania to the north, and the Black Sea to the east. The capital, Sofia, lies in the western region of the country. Ethnic groups include Bulgarian, Turkish, Roma, and others. The official language is Bulgarian.

HISTORICAL HIGHLIGHTS
Ancient Thrace was partially located on the territory of modern Bulgaria, and Thracian culture provides a wealth of archeological sites within Bulgaria. In the second century A.D., the Bulgars came to Europe from their old homeland, the Kingdom of Balhara situated in the Mount Imeon area (present Hindu Kush in northern Afghanistan).

The first Bulgarian state was established in 635 A.D., located along the north coast of the Black Sea. In 681 A.D. the first Bulgarian state on the territory of modern Bulgaria was founded. This state consisted of a mixture of Slav and Bulgar peoples. In 864, Bulgaria adopted Orthodox Christianity. The First Bulgarian Kingdom, considered to be Bulgaria's "Golden Age," emerged under Tsar Simeon I in 893-927. During this time, Bulgarian art and literature flourished. Followers of Saints Cyril and Methodius are believed to have developed the Cyrillic alphabet in Bulgaria in the early 10th century.

In 1018, the Byzantine Empire conquered Bulgaria. In 1185 the Bulgarians broke free of Byzantine rule and established the Second Bulgarian Kingdom. A number of Bulgaria's famous monasteries were founded during this period. Following the 1242 Mongol invasion, this kingdom began losing territory to its neighbors. Ottoman expansion into the Balkan Peninsula eventually reached Bulgaria, and in 1396 Bulgaria became part of the Ottoman Empire. During the five centuries of Ottoman rule, most of Bulgaria's indigenous cultural centers were destroyed. Several Bulgarian uprisings were brutally suppressed and a great many people fled abroad. The April uprising of 1876, the Russo-Turkish War (1877-78), and the Treaty of San Stefano (March 3, 1878, the date of Bulgaria's national holiday), began Bulgaria's liberation from the Ottoman Empire, but complete independence was not recognized until 1908.

During the first half of the 20th century, Bulgaria was marred by social and political unrest. Bulgaria participated in the First and Second Balkan Wars (1912 and 1913) and sided with the Central Powers, and later the Axis Powers, during the two World Wars. Although allied with Germany during World War II, Bulgaria never declared war on the Soviet Union and never sent troops abroad to fight under Nazi command. Near the end of World War II, Bulgaria changed sides to fight the German army all the way to Austria; 30,000 Bulgarian troops were killed.

Bulgaria had a mixed record during World War II, when it was allied with Nazi Germany under a March 1941 agreement. The Law for the Protection of the Nation, enacted in January 1941, divested Jews of property, livelihood, civil rights, and personal security. Despite a February 1943 agreement requiring Bulgaria to transfer Bulgaria's Jews to Nazi extermination camps in Poland, Bulgaria did not actually deport any Bulgarian Jews or Roma to Nazi concentration camps. Under that agreement, however, Bulgarian forces transferred approximately 11,000 Jews from Bulgarian-occupied territory (Thrace and Macedonia) to Nazi concentration camps. In June 1943 the government "re-settled" Sofia's 25,000 Jews to rural areas. Tsar Boris--supported by the parliament (especially its prominent Deputy Speaker, Dimitar Peshev), the Orthodox Church, and the general public--aided the Jewish community and helped its 50,000 members survive the war, despite harsh conditions. The Bulgarian Jews remained safe, and when they were permitted to emigrate to Israel after the war, most of them did.

King Simeon II assumed control of the throne in 1943 at the age of six following the death of his father Boris III. With the entry of Soviet troops into Bulgaria in September 1944 and the defeat of the Axis Powers in World War II, communism emerged as the dominant political force within Bulgaria. Simeon, who later returned and served as Prime Minister, was forced into exile in 1946 and resided primarily in Madrid, Spain. By 1946, Bulgaria had become a satellite of the Soviet Union, remaining so throughout the Cold War period. Todor Zhivkov, the head of the Bulgarian Communist Party, ruled the country for much of this period. During his 27 years as leader of Bulgaria, democratic opposition was crushed; agriculture was collectivized and industry was nationalized; and the Bulgarian Orthodox Church fell under the control of the state.

In 1989, Zhivkov was removed from power, and democratic change began. The first multi-party elections since World War II were held in 1990. The ruling communist party changed its name to the Bulgarian Socialist Party and won the June 1990 elections. Following a period of social unrest and passage of a new constitution, the first fully democratic parliamentary elections were held in 1991 in which the Union of Democratic Forces won. The first direct presidential elections were held the next year.

As Bulgaria emerged from the throes of communism, it experienced a period of social and economic turmoil that culminated in a severe economic and financial crisis in late 1996-early 1997. With the help of the international community, former Prime Minister Ivan Kostov initiated a series of reforms in 1997 that helped stabilize the country's economy and put Bulgaria on the Euro-Atlantic path. Elections in 2001 ushered in a new government and president. In July 2001, Bulgaria's ex-king Simeon Saxe-Coburg-Gotha became the first former monarch in post-communist Eastern Europe to become Prime Minister. His government continued to pursue Euro-Atlantic integration, democratic reform, and development of a market economy. Bulgaria became a member of the North Atlantic Treaty Organization on March 29, 2004, and a member of the European Union on January 1, 2007.

Following June 2005 general elections, Sergei Stanishev of the Bulgarian Socialist Party became the new Prime Minister of a coalition government on August 16, 2005. In October 2006, Georgi Parvanov, the former leader of the Bulgarian Socialist Party, became the first Bulgarian president to win re-election. Despite his limited constitutional powers, President Parvanov has played an important role in helping to ensure a consistent, pro-Western foreign policy. The Stanishev government has continued Bulgaria's integration with the Euro-Atlantic world and its close partnership with the U.S. Bulgaria is attracting large amounts of American and European investment, and is an active partner in coalition operations in Iraq and Afghanistan as well as in UN-led peacekeeping operations in the Balkans.

GOVERNMENT AND POLITICAL CONDITIONS
Bulgaria is a parliamentary republic. The unicameral National Assembly, or Narodno Subranie, consists of 240 deputies who are elected for 4-year terms through a system of proportional representation in 31 electoral regions. Party or coalition lists, rather than individual candidate names, appear on the ballots. A party or coalition must garner a minimum of 4% of the vote to enter parliament. Parliament selects and dismisses government ministers, including the prime minister, exercises control over the government, and sanctions deployment of troops abroad. It is responsible for enactment of laws, approval of the budget, scheduling of presidential elections, declaration of war, and ratification of international treaties and agreements.

A one-month official campaign period precedes general elections. The voting age is 18. Preliminary results are available within hours of poll closings. Seats in parliament are allocated both by vote and by voter turnout. The votes for parties who did not receive a minimum threshold of votes are redistributed to other parties proportionate to their own share of the vote. The lists of newly elected members of parliament are announced 7 days after the elections. The president must convene the new parliament within one month after the elections, and calls upon parties, coalitions, or political groups to nominate a prime minister and form a government. If the three largest parties, coalitions, or political groups fail to nominate a prime minister, the president can dissolve parliament and schedule new elections. In recent years, it has taken approximately a month for the new government to form.

A general election in Bulgaria was held June 25, 2005. Results were as follows: Coalition for Bulgaria (CfB) 31.1%, National Movement Simeon II (NMSS) 19.9%, Movement for Rights and Freedom (MRF) 12.7%, Ataka 8.2%, United Democratic Forces (UDF) 7.7%, Democrats for Strong Bulgaria (DSB) 6.5%, Bulgarian People's Union (BPU) 5.2%.

In May 2007, Bulgaria held its first elections for members of the European Parliament. The GERB (Citizens for European Development of Bulgaria) party, led by Sofia Mayor Boyko Borisov, won the vote by a narrow margin over the Socialists (BSP) and secured 5 out of 18 seats. The BSP won 5 seats, the MRF won 4 seats, Ataka won 3 seats, and Simeon Saxe-Coburg Gotha's NMSS won 1 seat.

The president of Bulgaria is directly elected for a 5-year term with the right to one re-election. The president serves as the head of state and commander in chief of the armed forces. The president is the head of the Consultative Council for National Security and while unable to initiate legislation, the president can return a bill for further debate. Parliament can overturn the president's veto with a simple majority vote. Bulgarian Socialist Party candidate Georgi Parvanov won the November 2001 presidential election and was re-elected in October 2006 as an independent candidate in a run-off against Volen Siderov, the leader of extreme nationalist Ataka Party.

The prime minister is head of the Council of Ministers, which is the primary component of the executive branch. In addition to the prime minister and deputy prime ministers, the Council is composed of ministers who head the various agencies within the government and usually come from the majority/ruling party or from a member party of the ruling coalition in parliament. The Council is responsible for carrying out state policy, managing the state budget and maintaining law and order. The Council must resign if the National Assembly passes a vote of no confidence in the Council or prime minister.

The Bulgarian judicial system became an independent branch of the government following passage of the 1991 constitution. Reform within this branch has been slow with political influence, widespread corruption, and long delays continuously plaguing the system. In 1994, the National Assembly passed the Judicial Powers Act to further delineate the role of the judiciary. In 2003, Bulgaria adopted amendments to the constitution, which aimed to improve the effectiveness of the judicial system by limiting magistrates' irremovability and immunity against criminal prosecution.

The trial, appellate, and cassation (highest appellate) courts comprise the three tiers of the judicial system. Military courts (at trial and appeal level) handle cases involving military and Ministry of Interior personnel. Administrative courts, effective since March 2007, specialize in reviewing appeals of government acts.

The Supreme Administrative Court and the Supreme Court of Cassation are the highest courts of appeal and determine the application of all laws.

The Supreme Judicial Council (SJC), which manages the judiciary and is responsible for appointing magistrates, is composed of 25 members serving 5-year terms. Those who serve on the council are experienced legal professionals and are either appointed by the National Assembly, selected by the judicial system, or serve on the SJC as a result of their position in government. In 2007 parliament revised the Judicial Powers Act to make it compliant with the latest constitutional amendments, which provided for the establishment of the Inspectorate with the Supreme Judicial Council: a standing body with 11 members who investigate complaints of magistrates' misconduct, with no right to rule on the substance of judicial acts.

The Constitutional Court, which is separate from the rest of the judiciary, interprets the constitution and constitutionality of laws and treaties. Its 12 justices serve 9-year terms and are selected by the president, the National Assembly, and the Supreme Courts.

Principal Government Officials
President--Georgi Parvanov
Prime Minister--Sergei Stanishev
Deputy Prime Minister/Minister of Foreign Affairs--Ivailo Kalfin
Deputy Prime Minister/Minister of Education--Daniel Valtchev
Deputy Prime Minister/Minister of Emergency Situations--Emel Etem
Deputy Prime Minister/Minister of European Funds--Meglena Plugtschieva
Minister of Economy and Energy--Petar Dimitrov
Minister of Finance--Plamen Vassilev Oresharski
Minister of Defense--Nikolai Tsonev
Minister of Interior--Mihail Mikov
Bulgaria's Commissioner to the EU--Meglena Kuneva, Commissioner for Consumer Protection

Bulgaria maintains an embassy in the United States at 1621 22nd Street, NW, Washington DC 20008 (tel. 202-387-0174; fax: 202-234-7973).

ECONOMY
Bulgaria's economy contracted dramatically after 1989 with the collapse of the COMECON system and the loss of the Soviet market, to which the Bulgarian economy had been closely tied. The standard of living fell by about 40%. In addition, UN sanctions against Yugoslavia and Iraq took a heavy toll on the Bulgarian economy. The first signs of recovery emerged when GDP grew in 1994 for the first time since 1988, by 1.4% and then by 2.5% in 1995. Inflation, which surged in 1994 to 122%, fell to 32.9% in 1995. During 1996, however, the economy collapsed due to shortsighted economic reforms and an unstable and de-capitalized banking system.

Under the leadership of former Prime Minister Ivan Kostov (UDF), who came to power in 1997, an ambitious set of reforms were launched, including introduction of a currency board regime, bringing growth and stability to the Bulgarian economy. The currency board contained inflationary pressures and the three-digit inflation in 1997 was cut to only 1% in 1998. Following declines in GDP in both 1996 and 1997, the Bulgarian Government has delivered strong, steady GDP growth in real terms in recent years. Prime Minister Simeon Saxe-Coburg's economic team of young, Western-educated financiers continued to implement measures that helped sustain stable economic growth and curb unemployment. Measures introduced by the government were targeted at reducing corporate and individual taxes, curtailing corruption, and attracting foreign investment. The government also restructured the country's foreign debt, revived the local stock market, and moved ahead with long-delayed privatization of some major state monopolies. As a result of this progress, in October 2002 the European Commission declared Bulgaria had a "Functioning Market Economy."

Bulgaria's current government has continued these reforms, and in 2007 the country joined the European Union. According to the World Bank, in 2006 Bulgaria attracted the highest levels of foreign direct investment, as a share of GDP, among Eastern European countries. A growing current-account deficit (21.5% of GDP at the end of 2007) and excessive reliance on foreign capital inflow render the economy vulnerable to external shocks. The international financial crisis led to a new flow of investment which could barely cover the current-account deficit in 2007--at 98.2%. In early 2007, to attract additional foreign investment, the Bulgarian Government lowered corporate tax rates to 10%, reportedly the lowest rate in Europe. A flat-tax rate of 10% for personal income, in place as of January 1, 2008, will further decrease domestic labor costs and help reduce the share of the "gray" economy. In response to local governments' demand for financial independence in 2006, parliament passed fiscal decentralization of municipalities, granting them authority over collection and administration of some taxes, thus further enhancing local economic stability. Despite Bulgaria's many marked successes, organized crime and corruption remain problems.

DEFENSE
Bulgaria became a member of NATO on March 29, 2004 after depositing its instruments of treaty ratification. Bulgaria's military is currently undergoing an ambitious restructuring program aimed to bring the army up to NATO standards and modernize equipment. In 2007, constitutional amendments annulled military conscription, thus allowing the Bulgarian army‘s transformation to an all-volunteer force.

Bulgaria has been an active participant in military operations outside its borders. It currently has company-sized units working with coalition forces in Afghanistan and Iraq and has maintained small contingents of troops deployed with international forces in Bosnia and Herzegovina and Kosovo. It deployed a frigate to Lebanon with UNIFIL in late 2006 and has several military observers serving in support of United Nations missions in Ethiopia, Liberia, and Kosovo. Bulgaria has also expressed its intent to send military observers to Chad in support of the European Union mission.

FOREIGN RELATIONS
Bulgaria became a member of the North Atlantic Treaty Organization on March 29, 2004, and a member of the European Union on January 1, 2007. Bulgaria is a member of the United Nations and in 2002-2003 served a 2-year term as a nonpermanent member on the UN Security Council. Bulgaria served as Chair-In-Office of the Organization for Security and Cooperation in Europe (OSCE) in 2004.

Bulgaria joined the World Trade Organization in 1996. In July 1998, Bulgaria became a full member of the Central European Free Trade Agreement (CEFTA), which called for the reduction of tariffs by 2002 on most industrial and agricultural goods traded between CEFTA countries. Bulgaria has initialed free trade agreements with Turkey, Macedonia, Croatia, Lithuania, Estonia, Israel, Albania, and Latvia.

Bulgaria's relationship with its neighbors has generally been good. Bulgaria has proven to be a constructive force in the region and has played an important role in promoting regional security. Pursuing its initiative as a partner in the South-East European regional cooperation, Bulgaria held the chairmanship-in-office of the South-East European Cooperation Process (SEECP) for the period May 2007-May 2008.

U.S.-BULGARIAN RELATIONS
The year 2003 marked the 100th anniversary of diplomatic relations between the United States and Bulgaria. U.S.-Bulgarian relations were severed in 1950 but were restored a decade later. Bilateral relations between the two nations improved dramatically after the fall of communism. The United States moved quickly to encourage development of multi-party democracy and a market economy. The U.S. signed a Bilateral Investment Treaty in 1994 and gave Bulgaria most-favored-nation trade status in October 1996.

In 1989, the U.S. Congress passed the Support for East European Democracies Act (SEED), authorizing financial support to facilitate development of democratic institutions, political pluralism, and free market economies in the Balkan region. Since 1990, Bulgaria has received over $600 million in SEED assistance. In 2007, after its EU accession, Bulgaria graduated from the SEED program and from U.S. Agency for International Development (USAID) assistance.

In May 2005 the United States and the Republic of Bulgaria signed a defense cooperation agreement, which gives the United States military access to and shared use of several Bulgarian military facilities. The United States military intends to use this access to facilitate joint training with the Bulgarian and Romanian militaries. In February 2007, Bulgaria and the United States signed a treaty on avoidance of double taxation that is expected to further promote U.S. investment in Bulgaria. In June 2008, Bulgaria and the United States signed a weapons of mass destruction agreement and a Second Line of Defense agreement, both of which facilitate greater cooperation in preventing the proliferation of weapons and trafficking of illicit material.

American citizens traveling on a U.S. passport for business or tourism purposes can enter and stay in Bulgaria for up to 90 days in a 6-month period without requiring issuance of a visa.

Bulgaria hosts the only fully American university in the region, the American University of Bulgaria in Blagoevgrad, established in 1991, drawing students from throughout southeast Europe and beyond. As of 2007, the American University of Bulgaria had over 1,000 students.

In June 2007, President Bush visited Sofia following the first visit of a U.S. President, Bill Clinton, in 1999.

Principal U.S. Officials
Ambassador--Nancy E. McEldowney
Deputy Chief of Mission--Alexander Karaqiannis
Consular Officer--Daniel Perrone
Head of Political/Economic Section--James Bigus
Head of Public Affairs Section--Katherine Ingmanson
Senior Commercial Officer--Scott Pozil

The U.S. Embassy is located at 16 Kozyak Street, Sofia; tel: [359] (2) 937-5100; facsimile: [359] (2) 9375-320.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.

STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.

ENDS

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