Bulgaria faces new power fight

Having spent the best part of the year reeling from an economic crisis which has seen the value of the national currency plummet, prices soar and bread queues form for the first time since 1989, Bulgarians had hoped their annus horribilis had no more surprises in store.

No such luck. As the person blamed for many of the country's woes, the Prime Minister, Zhan Videnov, decided at the weekend that enough was enough and that he and his cabinet would resign forthwith. In one fell swoop, economic problems were compounded by a full-blown political crisis.

Mr Videnov's announcement, during a special congress of the Socialist Party (the reformed successor to the Communists), unleashed a power struggle between those anxious to implement economic reforms and those keen to block them. Whoever wins will face opposition calls for fresh elections.

"Mr Videnov's departure underlines the total helplessness of his government and party," said Ivan Kostov, leader of the opposition Union of Democratic Forces. "Now there are better chances to find a way out of the current crisis ... through early elections."

The Socialist Party romped to victory in parliamentary elections two years ago after promising to cushion the impact of market reforms. Instead of cushioning reforms, however, the government stalled on them, plunging the country into its worst economic crisis since Communist times and leaving it even further behind its former Warsaw Pact allies.

While countries such as Poland and Hungary are knocking on the door of Nato and the European Union, Bulgaria still appears to be closer to Moscow than it is to Brussels and has attracted the lowest level of foreign investment in the region.

The government's failure to meet reform targets, including the closing or restructuring of loss-making state enterprises, earlier this year led to the suspension of funding from the World Bank and the International Monetary Fund, moves which themselves precipitated a run on the national currency, the lev, which has fallen sevenfold against the dollar.

The result has been catastrophic: queues for bread (due to wheat shortages) and a rush for hard currency at banks, and almost daily price rises in the shops (annual inflation is set to reach 280 per cent).

On top of that, corruption and crime are rampant, as exemplified by the killing in October of the former prime minister Andrei Lukanov, believed to have been about to give details of high-level government corruption.

Not surprisingly, seasonal cheer is in short supply in Sofia. But there is still some room for humour. "Have the Bulgarian people reached the bottom yet?" runs a current joke. "Yes, but they're digging deeper."