![[CRS Issue Brief for Congress]](iblogo.gif)
For additional information see the following CRS products.
CRS Issue Brief 92051, Poland, Czech Republic, Slovakia, Hungary: Recent Developments.
CRS Issue Brief 93074, East Central European Economic Trends.
CRS Issue Brief 95076, NATO: Congress Addresses Expansion of the Alliance.
Elections in Romania, Bulgaria, and Albania first brought former Communist parties, renamed Socialists, into power. In Romania, the National Salvation Front, which took power after Ceausescu's ousting and execution in 1989, was elected to retain power in 1990. Bulgaria's Socialist Party won an absolute majority in the country's first free elections in 1990. Similarly, the Albanian Party of Labor, renamed the Socialist Party, came to power in 1991.
Second elections brought opposition parties to power in Bulgaria and Albania. In Bulgaria, the opposition Union of Democratic Forces won Bulgaria's second free elections by a small margin in October 1991. Albania's opposition Democratic Party soundly defeated the Socialists in the March 1992 elections. In Romania's second elections in September 1992, the Democratic National Salvation Front (renamed the Party of Social Democracy) won a plurality, but not a majority, of the vote.
As in some other East European countries, former communist parties have been making a comeback. The Bulgarian Socialist Party won an absolute majority of the vote in December 1994 elections. Elections in May and June 1996 in Albania brought a resounding victory to the Democratic Party at the expense of the Socialists, but the conduct of the elections was widely criticized. Romanians, however, installed the democratic opposition in November 1996 elections. The political transition in the region continues to face difficulties as evidenced by splits and mergers of fledgling political parties, unstable governments, and lack of popular consensus on various pressing issues. The process of transformation is expected to last many years.
The economic problems facing the new governments in these countries were severe. The legacy of centralized, Soviet-dominated economies continues to pose major structural challenges to the new governments, which have generally chosen a more cautious approach to economic reforms than the former Soviet-dominated countries of Central Europe. At the same time, the three countries are seeking reintegration with western European institutions such as NATO and the European Union (EU).
The international environment surrounding southeastern Europe has been transformed. Romania and Bulgaria are no longer part of the Soviet-dominated Eastern bloc of states, and Albania has fully emerged from fifty years of isolation. As a result of the break-up of Yugoslavia and the Soviet Union, the Southeastern Euro-pean countries have new states as neighbors. The war in Bosnia had disrupted major trading routes and economic links, and observance of U.N sanctions against ex-Yugoslavia has incurred high costs as well. In 1994, Romania, Bulgaria, and Albania established closer links with NATO through the alliance's Partnership for Peace, a U.S. initiative for strengthening ties with non-NATO European states, including states of the former Soviet Union.
In Bulgaria, opposition challenger Petar Stoyanov defeated the Socialist Party candidate in presidential elections after the second round on November 3. Earlier in the year, incumbent President Zhelev had lost to Stoyanov in a primary vote among opposition parties. Stoyanov's victory is seen as a major defeat for the Socialist-led government under Prime Minister Videnov, which bears the brunt of the blame for Bulgaria's dire economic situation.
Since 1989, the countries of southeastern Europe -- Albania, Bulgaria, and Romania -- have been emerging from imposed Soviet-style systems and transforming into democratic, market economy countries. While each country's history and heritage in the Balkans is distinct, four decades of Soviet-dominated communist rule left a common legacy of single-party rule, repressive regimes, centralized economies, closed societies, and restricted sovereignty. The end of communism came quickly to east central and southeastern Europe. In different stages, the old communist governments in Romania, Bulgaria, and Albania were replaced. All three countries have moved toward full democratization, market economic reforms, and integration into Europe, a process which is expected to last many years.
During the Cold War, U.S. relations with Romania, Bulgaria, and Albania were somewhat differentiated. Bulgaria was considered the most stalwart Soviet ally in the Eastern bloc. Romania was favored for a while for its "independence" from Moscow, but the United States government cooled its relations with Romania in the face of extreme domestic repression of the Ceausescu government. The United States for a long time maintained no relations at all with self-isolated Albania. The end of the Cold War left each of these countries with different political environments, economic conditions, and geo-strategic concerns. Thus, few trends evident in one country can be considered regional. After 1989, U.S. relations with all of the former Eastern bloc countries improved rapidly, and governmental, congressional, and private contacts with the new governments in southeastern Europe have continued to expand. Many U.S. policymakers and Members of Congress believe it is in the United States' interest to help these countries along the path toward full democracy and functioning market economic systems, and to push this trend further eastward. They also believe that consolidation of open democratic systems in all three countries could contribute to stability in the turbulent Balkan region.
In response to increasing calls for extending NATO's security guarantee eastward, the Clinton Administration in October 1993 proposed establishing "partnerships" between NATO members and non-NATO European countries. The Partnership for Peace (PFP), a program to enhance cooperation with NATO while not guaranteeing membership in the alliance, was launched at the January 1994 NATO summit. Romania was the first country to sign the PFP framework document. Bulgaria joined PFP on February 14, 1994, and Albania on February 23, 1994. Although most observers expect eventual NATO expansion first to Central European countries, all of the southeast-European countries have expressed interest in eventual NATO membership. NATO approved a study of the "how and why" of enlargement in September 1995. In December 1995, NATO ministers launched a phase of "intensified dialogue" with prospective members. In December 1996, NATO announced that the alliance would hold a summit in July 1997 to, among other tasks, invite some countries to begin accession negotiations. Most observers do not predict that Romania, Bulgaria, or Albania will be among the first countries to join the Atlantic alliance.
U.S. Aid. In 1989, Congress passed P.L. 101-179, the Support for East European Democracy (SEED) Act, which authorized foreign assistance to Poland and Hungary. SEED Act support was later extended to other Central and Eastern European countries, including Romania, Bulgaria, and Albania. The United States has also provided food and medical aid to southeastern Europe, and has supported multilateral assistance through international financial institutions. U.S. bilateral assistance programs to Central and Eastern Europe continue to emphasize economic growth, democracy building, and improving quality of life. For FY1996, Congress appropriated $324 million for Eastern Europe, and $70 million for the EBRD in P.L. 104-107. For FY1997, Congress appropriated $275 million for Eastern Europe and an additional $200 for Bosnia reconstruction, in P.L. 104-208. According to the Agency for International Development, U.S. assistance to Eastern Europe is being targeted increasingly on southern tier countries.
Romania exploded in a brief but violent revolution in December 1989. Within a short time, the government was toppled, and President Nicolae Ceausescu, along with his wife, Elena, were executed on Christmas day. Ion Iliescu emerged to head a provisional government -- the National Salvation Front. Iliescu, a high-ranking Communist party official before his demotion by Ceausescu in 1971, pledged to introduce a democratic form of government and a market-based economic system.
Romania held its first multiparty elections on May 20, 1990, and the National Salvation Front (NSF) won a sweeping victory. Iliescu became President, and named Petre Roman Prime Minister. However, in the spring of 1990, mass demonstrations for greater democracy rocked the capital, Bucharest, and in what was perceived as a blow to the democratization process, President Iliescu allegedly summoned miners from the Jiu Valley to "save the revolution" by attacking demonstrators. Miners rioted again in September 1991, but this time against the rapid pace of the government's reforms, and ended Roman's leadership.
In March 1992, Iliescu and his supporters left the NSF to form the off-shoot Democratic National Salvation Front, since renamed the Social Democracy Party of Romania (PDSR). The Democratic Convention (CDR), a coalition of political parties, formed the main opposition; it is chaired by Emil Constantinescu, rector of the University of Bucharest. In September 1992, Iliescu was elected President with 61% of the vote, defeating Constantinescu, who received 38.6%. Iliescu's party won the largest share, but not a majority, of seats in the Parliament. The CDR came in second and became the official opposition. Nicolae Vacaroiu, an economist, was appointed prime minister; his minority government relied on the support of extremist parties.
Romania held its third national elections on November 3, 1996. The opposition CDR won the largest number of votes, toppling the PDSR from power. The CDR has formed a coalition government with the Social Democratic Union (USD, a newly formed coalition of Petre Roman's Democratic Party and the small Social Democratic Party), and the ethnic Hungarian party. In the presidential race, Iliescu came out on top in the first round of voting with 32%. However, Constantinescu won his rematch against Iliescu, 54%-46%, in run-off elections two weeks later. The former academic takes the reins of a country beset by many problems, particularly in the economic sphere.
Romania's initially gloomy economic picture began to improve by mid-decade, but has suffered some serious setbacks recently. Real GDP, which dropped 8.8% in 1992, showed a 1.5% gain the following year, rose 3.9% in 1994, and jumped a healthy 6.9% in 1995. Although the exchange rate for the Romanian leu had generally stabilized by 1995, it began a steep depreciation at the end of that year. Inflation fell from 300% to 60% in 1994, and to about 30% in 1995, but began to climb again in 1996 -- it was estimated at about 45% in the third quarter. Exports and foreign investment continue to increase, and the trade deficit has fallen; external debt is low; and unemployment has been brought down to below 10%. In May 1994, Romania was approved for credits from the International Monetary Fund (IMF), and has received assistance from the World Bank and the European Bank for Reconstruction and Development.
Romania still faces many other serious problems: the level of foreign investment remains relatively modest, the pace of privatization of State-owned enterprises lags behind that of other former East Bloc countries, there is periodic labor unrest, hard currency reserves are dangerously low, and the World Bank and IMF have urged Romania to drastically restructure its economy. The 1995 U.S. State Department report on human rights found the Romanian government "generally respected the rights of its citizens," but noted several problems, particularly in the judicial system. In addition, Romania continues to be plagued by a host of social ills, including corruption, smuggling, and crime.
Since the end of the Ceausescu era, more than 200 parties of all stripes have sprouted up in Romania; political organizations are still being newly formed, expiring, or splitting off, amoeba-like, from existing parties. Less than a dozen parties actually hold seats in parliament today, and most political power is exercised by the ruling party and the opposition coalition.
After months of working in cooperation with three extremist parties -- the Party of Romanian National Unity (PUNR), the Greater Romania Party (PRM), and the Socialist Party of Labor (PSM) -- Vacaroiu in January 1995 formalized the four-party coalition with a written protocol. The opposition charged that Iliescu's PDSR had been compromised by "fascist" elements that tarnished Romania's reputation abroad. In February 1996, U.S. Ambassador to Romania Alfred Moses reportedly stated that the extremists' inclusion in the government would not help Romania in joining NATO and the European Union (EU). The PDSR evidently came around to that assessment: in October 1995, the ruling coalition jettisoned the PRM from its ranks after the party's newspaper, Romania Mare, published a hysterical, antisemitic piece attacking President Iliescu. The ruling party followed this move by breaking with the PSM on March 16 1996, and ejected the PUNR in early September. The changes left the PDSR in a minority position in parliament. The opposition Democratic Convention coalition came in for its share of travails as well. Since late 1994, several parties have left to form other coalitions.
Romania held local elections on June 2; in the elections for mayor and local and county councils, the PDSR and CDR ran fairly close. Tallied together, however, the various opposition parties ran about ten percentage points ahead of the PDSR and the three parties with which it had been allied. In the Bucharest mayoral race, CDR candidate Victor Ciorbea defeated former tennis star Ilie Nastase, who ran under the PDSR banner.
In the November 3 national elections, the CDR, which had been leading in most polls, won a plurality of 30%, easily besting the PDSR, which captured just 22%. Petre Roman's USD came in third with 13%, while the Hungarian Democratic Union of Romania (UDMR, the party of Romania's ethnic Hungarians) won 7%. The extremist PUNR and PRM each received less than 5%, while the PSM failed to attain the 3% threshold necessary to be seated in parliament.
Although presidential race featured a crowded field of 16 candidates, there are three main contenders: Iliescu, Constantinescu, and former Prime Minister Petre Roman. Iliescu was favored to win reelection, but his lead narrowed considerably as voting day drew near. Initially, Iliescu campaigned by pointing to his foreign policy achievements - - including receiving most-favored-nation status from the United States and the concluding a basic treaty with neighboring Hungary -- and also by appealing to Romanians' desire for stability and their fear of the effects that swift reforms might entail. However, when Iliescu failed to capture a majority in the first round, his campaign reportedly turned negative, implying that Constantinescu might restore the monarchy and provide too much autonomy to the country's large Hungarian minority. Constantinescu denied the charges, and performed well in one-on-one nationally televised debates; he charged that Iliescu and the PSDR had impoverished Romania by failing to reform the economy sufficiently, and had ignored rampant corruption.
On November 3, in the first round of voting, Iliescu won just 32.25%. He was trailed by Constantinescu (28.21%), Roman (20.54%), and UDMR candidate Gyorgy Frunda (6.02%); the other 12 candidates all received less than 5%. In the runoff vote two weeks later, Constantinescu triumphed with 54% of the vote.
Even before the second round of the presidential elections was held, a ruling coalition had formed; the CDR teamed up, as expected, with the USD. Although the two parties could have ruled with a narrow majority, they chose instead to invite the UDMR to join them. Bucharest's new mayor, Victor Ciorbea, has been named prime minister. Many observers believe that this "coalition of coalitions" may experience strain as its disparate ideologies emerge in debate over policy issues.
By official count, Romania has 14 ethnic minorities. The largest group is the approximately 1.7 million ethnic Hungarians, most of whom live in Transylvania, in the western part of the country. Subject to harsh treatment and a policy of forced assimilation under the Ceausescu regime, the ethnic Hungarians formed their own organization, the Hungarian Democratic Union of Romania (UDMR), shortly after the 1989 revolution.
In August 1994, UDMR leader Bela Marko renewed a call for autonomy for the Hungarian minority. He called for special status for areas of Transylvania where "compact Hungarian populations" live, emphasizing that "these regions should become associated and the Hungarian language should have the same status as the Romanian language ... [and] the Hungarian minority should have greater power of decision regarding education and culture." Marko's statements provoked angry reactions from Romanian politicians from both the ruling coalition and opposition parties; many believed that such claims were but a first step toward altering Romania's borders. The most virulent critic of the ethnic Hungarians has been Cluj mayor and PUNR president Gheorghe Funar, who demanded that ethnic Hungarians be required to be tested on the Romanian language and constitution, and that they swear loyalty oaths. Despite criticism from across the political spectrum, Funar has continued to denounce the ethnic Hungarians.
Romania has made considerable efforts to cultivate its relations with other countries, especially in the West. In 1993, Romania became an associate member of the EU, and on June 22, 1995, formally submitted its application to become an EU member. In early 1994, Romania became the first former Eastern bloc country to join NATO's Partnership for Peace program, and in April 1996 formally applied to join NATO. On October 4, 1994, Romania became a member of the Council of Europe. In March 1995, Romania signaled more active participation in the United Nations by announcing it would send a battalion of troops and medical staff to help preserve a truce in the civil war in Angola.
Romania was active in seeking an end to the war in former Yugoslavia (FYU). In addition to humanitarian and regional security concerns, the Romanians had strong economic interests at stake: government officials claim that the United Nations-imposed trade embargo (which Romania supported) cost Romania approximately $8 billion in lost income. In the wake of the Dayton Accord, the Romanian government began to reestablish economic and political ties with governments in the region, and dispatched a 200-strong sapper battalion to NATO-led IFOR.
After the dissolution of the Soviet Union in late 1991, Romania sought unification with Moldova, a large share of whose inhabitants speak Romanian. However, Moldovan elections in February 1994 resulted in victory for pro-independence forces, and a defeat for parties in favor of union with Romania. President Iliescu asserted that Moldova is "a second Romanian state." In 1995, relations between the two countries were less than cordial, but since that time, there have been signs of considerable improvement.
Romania and Hungary have been seeking to normalize bilateral relations, which have been hampered by nationalist elements in both countries. For four years, efforts to hammer out a basic treaty were stymied by differences over provisions on the treatment of ethnic minorities. Much of the debate focused on whether the treaty should contain reference to Recommendation 1201, a protocol on the rights of national minorities to the Council of Europe's framework Convention on Human Rights.
Aware that normalization of bilateral relations is a key precondition for acceptance into the EU and NATO, officials of both countries were under considerable pressure to conclude a treaty; both Secretary of State Christopher and U.S. Ambassador Alfred Moses urged the two countries to reconcile their differences. In August 1996, the two countries made a surprise announcement that they had reached an accord. On September 16, in Timisoara, the Transylvanian city where Romania's revolution began, Prime Minister Vacaroiu and Hungarian Prime Minister Gyula Horn signed the 10-year Treaty of Understanding, Cooperation and Good-Neighborliness. The pact covers a range of issues, including cooperation in such areas as trade, culture, security , the environment, and law enforcement. The highlights of the accord, however, were two provisions: the mutual declaration that the two countries harbor no current or future territorial claims; and a compromise reference to Recommendation 1201. The agreement was endorsed by most of Romania's major political parties, but roundly condemned by nationalists as giving away too many concessions to Hungary and to Romania's ethnic Magyars. In addition, a poll revealed that 74% of ethnic Hungarians supported the treaty.
U.S. relations with Romania since the 1989 revolution were initially less positive than with other former communist countries. Immediately after the 1989 revolution, the United States recognized the new Romanian government and provided food and medical aid. Other assistance was made contingent upon the new Romanian government acting on its pledge to restore full democracy and human rights. The Bush Administration denounced the 1990 intervention of the miners, who forcibly broke up peaceful protests. The FY1991 appropriations for foreign operations (P.L. 101-513) included $3 million for humanitarian aid to Romania. Altogether, the United States since 1990 has obligated $148 million under the Support for East European Democracy (SEED) program, including $42 million in FY1995.
On July 2, 1993, President Clinton submitted to Congress the U.S.-Romanian Trade Agreement, which granted, after a 5-year break, most-favored-nation (MFN) trade status; the legislation was approved by Congress and signed into law on November 2. In May 1995, the President extended Romania's MFN status. Although the United States is one of the larger foreign investors in the country, trade in goods remains on a relatively modest scale. On September 26, 1995, former President Iliescu made his first official visit to Washington, D.C., where he met with President Clinton and members of the Cabinet and Congress. The two leaders discussed a variety of issues, including the conflict in former Yugoslavia, NATO enlargement, economic relations, and possible extension of permanent MFN status to Romania. President Clinton reportedly indicated he was favorable toward granting unconditional MFN, but signaled a desire to see further Romanian progress in economic reform and minority relations. On March 6, 1996, Senator Hank Brown introduced S. 1644, which authorized permanent MFN status to Romania. Representative Crane introduced companion legislation, H.R. 3161, in the House of Representatives. On July 17, the House passed the bill by a vote of 334-86, and the Senate approved S. 1644 by voice vote two days later; President Clinton signed the legislation on August 3 (P.L. 104-171). Although the House vote was lopsided in favor of passage, several Members argued strongly that Romania's MFN status should not be upgraded until after that country's elections. They expressed concern that the U.S. trade concession would otherwise become a campaign issue, aiding the ruling party in its bid for another mandate.
There have been numerous high level bilateral visits in 1996. In February, U.S. Joint Chiefs of Staff Chairman Shalikashvili traveled to Bucharest to discuss U.S.-Romanian security cooperation; Gen. Shalikashvili praised Romania's active participation in the Partnership for Peace program, and characterized the two countries' military relations as "very, very close." He was followed by departing Assistant Secretary of State Richard Holbrooke, who thanked Romanians for their contribution to the peace efforts in former Yugoslavia; he also discussed the status of democratic reforms and the Hungarian ethnic minority situation. During a tour of the region, U.S. First Lady Hillary Clinton visited Bucharest on July 1. She met with former President Iliescu and, addressing a crowd of 3,000 at Revolutionary Square, praised Romania's efforts at building a democratic society. In mid-July, Romanian Foreign Minister Teodor Melescanu visited Washington for further discussions on his country's MFN status and potential NATO membership. In October, Melescanu, Defense Minister Tinca, and other senior members of Romania's diplomatic corps traveled to the United States and other NATO member states to press Romania's case for early admittance into the alliance.
The United States will likely enjoy excellent relations with Romania's new government, as the CDR appears to favor greater political transparency and more rapid economic reforms. In addition, many U.S. policymakers, for a variety of reasons, were still uneasy with former President Iliescu and his party. The new coalition appears to be as eager as the previous government to cement its ties to the West by joining the EU and NATO.
Todor Zhivkov, the Communist Party leader since 1954, fell from power abruptly on November 10, 1989, in a "palace coup" orchestrated by other members of the Bulgarian Communist Party. Zhivkov was succeeded by Foreign Minister Petar Mladenov, who announced the end of the Communist Party's monopoly on power in December. In January 1990, the Communist Party and the new democratic opposition opened roundtable talks on holding multi-party elections. The Communist Party renamed itself the Bulgarian Socialist Party in March 1990 and won a majority of the vote in the June 1990 elections. Despite the electoral victory, a BSP-led government was not formed until August of that year. Continuing pressure from the opposition, student demonstrations, and strikes forced Prime Minister Lukanov to resign in December 1990. Lukanov was followed by Dimitar Popov, an independent. President Mladenov resigned in July 1990 in response to continuing protests. After repeated attempts by Parliament to elect a new president had failed (which required a two-thirds majority), Zhelyu Zhelev, leader of the Union of Democratic Forces (UDF), an umbrella organization for opposition groups formed in December 1989, was elected President by the parliament.
New elections were held in mid-October 1991. The UDF received a plurality of votes (34%) in these elections, narrowly defeating the Bulgarian Socialist Party, which came in second with 33%. The UDF formed a non-communist government headed by Filip Dimitrov, with the support of the third parliamentary party, the Movement for Rights and Freedoms (MRF) (representing the Turkish minority, which won 7.5% of the vote). In January 1992, President Zhelev won a majority of the vote in Bulgaria's first popularly contested presidential elections. Facing a grim economic situation with hyperinflation and shortages, the Dimitrov government strove to open the economy, reform the monetary system, and cooperate with the International Monetary Fund and the World Bank. After less than one year in office, however, the Dimitrov government resigned after narrowly losing a vote of no-confidence in parliament in October 1992. The BSP led the attack on the Dimitrov government, and was joined by the Movement for Rights and Freedoms.
With the backing of the MRF and the Socialist Party, Lyuben Berov, an unaffiliated adviser to the President on economic matters, became prime minister on December 30. During 1993 and much of 1994, the Berov "government of experts" withstood numerous challenges. Major differences arose between the UDF (especially former Premier Filip Dimitrov), on the one hand, and the Berov government and President Zhelev (one of the founders of the UDF) on the other. The UDF repeatedly sought to force the resignation of the Berov government and, in addition, of President Zhelev, but other parties remained opposed to early elections. On September 2, 1994, the Berov government finally resigned. On October 17, President Zhelev dissolved parliament, set a December date for early elections, and appointed a caretaker government headed by Reneta Indzhova, formerly head of the privatization agency.
The Socialist Party was favored to win early elections since it was the largest party in the country (drawing especially on the support from pensioners and the unemployed), and since other parties remained weak and divided. The second largest party, the Union of Democratic Forces, continued to be troubled by declining popularity and deep divisions among its member groups. A viable centrist bloc, long supported in principle by President Zhelev, remained elusive, although many small political parties had sprung up since the 1991 elections. Early elections for the 240-seat National Assembly were held on December 18, 1994. With 75% turnout, five parties passed the 4% voting threshold for parliamentary representation. The Socialist Party (joined by an Agrarian Party and the Eco-Glasnost Political Club) won 43.5% of the vote, and 125 seats in parliament, an absolute majority. The UDF came in second with 24.2% of the vote, and 69 seats. The Popular Union was next with 6.5%, and 18 seats; the Movement for Rights and Freedoms won 5.4% and 15 seats; the Bulgarian Business Bloc won 4.7% and 13 seats (6 MPs from the Business Bloc subsequently left the party and became independents). Neither New Choice nor the Democratic Alliance won seats in parliament. After the elections, the UDF elected Ivan Kostov, a former finance minister, to replace Filip Dimitrov as party chairman.
In January 1995, the Socialist Party leader Zhan Videnov became prime minister, leading a BSP-dominated government (comprising the BSP, the Agrarian National Union, and the Ecoglasnost Political Club). Videnov announced an "anti-crisis" program designed to revive the economy on the basis of "regulated" market economic principles. He targeted unemployment, inflation, and mass privatization to be his government's principal priorities. On March 27, the Videnov government approved of a mass privatization scheme, which would sell off about one-fifth of over 2,000 state-owned enterprises. Since mid-1995, however, structural reforms under the Videnov government have stalled. The Bulgarian economy is currently suffering from a shrinking gross domestic product, high inflation and a devalued currency.
The Videnov government and President Zhelev have been at odds over numerous issues since the government came to power, especially regarding economic policy and foreign policy priorities (see below). Zhelev has also promoted the concept of a "presidential republic" for Bulgaria, rather than the existing parliamentary system. Videnov has also faced criticism within the BSP. In July 1996, a faction within the party openly demanded Videnov's replacement. Following a preliminary agreement on a loan package with the International Monetary Fund, Prime Minister Videnov announced a series of austerity and structural reform measures on May 29, which are intended to address Bulgaria's growing financial crisis. The measures include bank closings, state enterprise restructuring, government spending cuts, and tax increases. Videnov told parliament that the alternative would be "the collapse of the country." Thousands of demonstrators staged protests in Sofia against the tax and fuel price increases. Videnov reshuffled his cabinet on June 7, and survived a vote of no-confidence in parliament on June 13. The IMF endorsed the economic program and approved a $582 million stand-by credit on July 19. Trade unions called for additional demonstrations against the government in October.
Bulgaria held presidential elections in October and November 1996. In a move to unite the non-Socialist opposition parties, the UDF, Agrarian Union, and the Movement for Rights and Freedoms agreed to put forth a joint candidate determined by a primary election. On June 1, incumbent President Zhelev ran opposite UDF candidate Petar Stoyanov. In an upset, Stoyanov defeated Zhelev by a wide margin, and Zhelev stated he would not run as an independent. On June 16, the BSP nominated Foreign Minister Georgi Pirinski to be its presidential candidate. However, the constitutional court ruled on July 23 that Pirinski did not fulfill the constitutional requirement that the president be a "Bulgarian citizen by birth" (Pirinski was born in New York). Eventually the BSP named a new candidate for president, Culture Minister Ivan Marazov. Two weeks before the vote, former premier and rival Socialist leader Andrei Lukanov was shot and killed outside of his home. His murder, as yet unresolved, is speculated to be related to corruption within the government.
In the first round on October 27, opposition candidate Stoyanov lead with about 44% of the vote. Socialist candidate Ivan Marazov trailed with 27%, and Bulgarian Business Bloc candidate George Ganchev pulled in 22%. Turnout was 62.7%. In the second round on November 3, Stoyanov won nearly 60% to Marazov's 40%. The Bulgarian media characterized the results as a blow to the Socialist government that may hasten a split in the ruling party and/or a possible coalition government. Many Socialist Party leaders have called for Videnov's resignation. However, on December 12, the BSP leadership gave Videnov a vote of confidence. Foreign Minister Pirinski, a potential replacement for Videnov, resigned from office the following day. Videnov's ultimate fate may be decided at the BSP party congress in late December.
Since the democratic changes in 1989, successive Bulgarian governments have sought to integrate with Western countries and institutions, and improve relations with its neighbors. Bulgaria signed an association agreement with the European Union on March 8, 1993, which provided for trade concessions and closer political links with the EU. On December 16, 1995, at the EU Madrid summit, Foreign Minister Pirinski submitted Bulgaria's application to join the EU. Pirinski called on the EU to launch negotiations with prospective member countries simultaneously, so as not to favor certain applicants over others.
Bulgaria was one of the first former Warsaw Pact countries to sign onto NATO's Partnership for Peace initiative (on February 14, 1994). In December 1995, Bulgaria forwarded various proposals to NATO on providing assistance to the Implementation Force in Bosnia, including providing a field hospital and other medical aid, but later withdrew a proposal to send an engineering battalion. Observance of economic sanctions against Serbia-Montenegro cost Bulgaria heavy financial losses. After the Dayton peace agreement for former Yugoslavia was reached in November 1995, Bulgaria swiftly suspended trade sanctions against Serbia and sought to normalize bilateral economic relations. Bulgaria has supported other regional institutions such as the OSCE and the Black Sea Economic Conference. Bulgaria has also promoted ad hoc regional cooperation initiatives, and initiated a conference on July 6-7 of Balkan foreign ministers to promote regional stability and cooperation. The resulting "Sofia Declaration on Good-Neighborly Relations, Stability, Security and Cooperation" comprised agreements on regional economic cooperation, and was proclaimed to represent a "new beginning" in regional cooperation in the Balkans. Bulgarian Prime Minister Videnov declared that the conference demonstrated that "cooperation in the Balkans is possible."
Foreign policy issues have periodically become the subject of disagreement between President Zhelev and the Socialist government. While President Zhelev has openly promoted NATO membership for Bulgaria, Prime Minister Videnov has rather emphasized participation in Partnership for Peace, and has stated that the government will only request NATO membership if doing so does not contradict the interests of another state. In his New Year's address, President Zhelev challenged the BSP "not to be afraid of...the word NATO," and has since repeatedly criticized the government for distancing Bulgaria from NATO. Zhelev and the opposition reacted strongly to statements made by Russian President Yeltsin on March 29, when he included Bulgaria as a possible future member of a new, Russian-led political union of some CIS states. Zhelev called the remark "scandalous" and questioned whether the Videnov government had conducted secret talks in Moscow. The government stated that Bulgaria's sovereignty was not negotiable, but its protests were viewed by the opposition as mild and late in coming. NATO Secretary-General Javier Solana, on a visit to Bulgaria in May, praised Bulgaria's participation in PFP, but noted the "lack of consensus" in Bulgarian society on the question of NATO membership.
Prior to 1989, U.S. relations with Bulgaria were limited. After the June 1990 elections, U.S.-Bulgarian relations began to improve slowly. By April 1991, a bilateral trade agreement was signed, clearing the way for Bulgaria to be granted MFN status in November 1991. After the October 1991 elections, the U.S. Administration applauded Bulgaria's accelerated move toward a free market economy and an open political system. The emergence of a non-communist government led by Filip Dimitrov was perceived as a particularly important development. U.S. assistance to Bulgaria has amounted to over $176 through September 30, 1995. On July 18, 1996, Congress enacted legislation (P.L. 104-162) approving permanent most-favored-nation trading status for Bulgaria.
Defense Secretary William Perry visited Bulgaria in mid-1994 and concluded a Memorandum on Defense Cooperation and Security Relationship which called for expanded military cooperation between the two countries. In February 1995, President Zhelev led a delegation of officials from the new Videnov cabinet to Washington in February 1995. In a joint declaration, Clinton and Zhelev stressed bilateral cooperation and U.S. support for Bulgaria's democratic and economic transformation and integration into Euro-Atlantic economic and security institutions. Clinton acknowledged the heavy losses undertaken by Bulgaria by economic sanctions against Serbia. Assistant Secretary Richard Holbrooke, visiting Sofia in October 1995, praised Bulgaria's "wise and courageous" foreign policy in the Balkans and pledged U.S. consideration of compensation to Balkan frontline states. In January 1996, U.S. Ambassador to Bulgaria William Montgomery ended his mission in Bulgaria early to take up a post as U.S. deputy coordinator for peace implementation in Bosnia; Avis Bohlen replaced Montgomery as U.S. Ambassador to Bulgaria. Foreign Minister Pirinski travelled to Washington in August 1996 and met with U.S. officials and with the International Monetary Fund.
Albania was the last East Central European country to embark on democratization and market economic reforms. Albania remained virtually cut off from the rest of the world for decades, especially after breaking off ties first with the Soviet Union, and later with China. The Communist Albanian Party of Labor, led by Enver Hoxha, exercised total political control until Hoxha's death in 1985. Hoxha's protege and successor, Ramiz Alia, was considered somewhat less repressive than Hoxha and began to expose Albania more to the outside world, but still maintained the Communist Party's exclusive hold on power. Large student demonstrations in late 1990 pushed the Alia government to accept multi-party elections.
Albania held its first free elections in forty-five years in March 1991. Although the elections' fairness was questioned by outside observers, the Albanian Party of Labor, later renamed the Albanian Socialist Party, won two-thirds of the vote and formed a government under Premier Fatos Nano. The fledgling opposition Democratic Party won most of the cities. Following large-scale strikes and demonstrations, the Nano government ceded power in June 1991 to a coalition government comprising members of all parties, including the Socialists and the opposition Democratic Party, headed by Premier Ylli Bufi. Members of the Democratic party were given most of the key economic positions and were primarily responsible for initiating new economic policies. In a controversial move within the party, the Democratic Party withdrew from the national stability government in December 1991, leading to new elections.
New general elections were held in March 1992. The elections resulted in a resounding victory for the Democratic Party, which gained 62% of the vote. The Socialist party obtained only 25% of the vote (compared to more than 67% the previous year). In April 1992, the new People's Assembly convened, President Alia resigned as the last communist leader in Albania, and Parliament elected Sali Berisha, a cardiologist and chairman of the Democratic Party, to the presidency. Aleksander Meksi, a civil engineer, formed a cabinet comprising three parties: the Democratic Party (DP), the Social Democratic Party (SDP), and the Republican Party (RP). The Socialist Party rebounded somewhat in local elections held in July 1992, winning 40% of the local vote.
The Democratic Party under President Berisha led a strong and stable government in the years following the 1992 elections, while the opposition Socialist Party remained the largest party in terms of membership in Albania. The arrest and imprisonment of Socialist Party leader Fatos Nano since 1993 left that party leaderless, but also galvanized its supporters around its imprisoned leader. In April 1994, Nano was sentenced to 12 years imprisonment for the misappropriation of state funds. Many international observers have criticized the sentence and conduct of the Nano trial. In September 1995, Albanian Supreme Court Chief Justice Zef Brozi vowed to review the case against Nano. The government called upon the constitutional court to rule against Brozi's authority to hear an appeal. On September 21, the parliament voted to replace Brozi as Chief Justice, although Brozi refuted parliament's authority to do so. More broadly, opposition groups and outside observers have charged the government, and especially President Berisha, with authoritarian tendencies. They point to Berisha's concentration of power in the presidency, the DP's control over the media, and the political motivations behind the trials and sentencing of political opponents. President Berisha suffered his first major political setback in November 1994, when his draft constitution was defeated, 54% to 42%, in a popular referendum. The defeat was widely viewed as a popular vote of no confidence in the President and government.
In September 1995, the parliament passed a controversial lustration law "on genocide and crimes against humanity" that facilitated prosecution of crimes from the communist period and banned former communists from political activity until 2002. A verification commission set up to enforce the law named dozens of Socialist Party members ineligible to run in the elections. The Socialist Party bitterly contested the legality of that law, as well as changes to the election law that increased the share of directly elected seats in parliament relative to seats assigned by party proportions.
Albania remains the poorest country in Europe, but its economic situation has transformed dramatically since 1989. In 1990-1991, grim economic prospects, extremely high unemployment, and food shortages prompted mass exodus attempts, especially by Albania's younger population. Tens of thousands of Albanians attempted to flee by sea to Italy in March and again in August 1991, but most were turned back. Albania became dependent on foreign food aid during these early years. Large, inefficient industries were abandoned, and collectivized farms swiftly dismantled. Albania's subsequent growth rates have surpassed most expectations. In 1993, Albania experienced 10% GDP growth, and agricultural output rose by 14%. The economy continued to grow about 8% in 1994, and 6% in 1995. Albania also has many untapped natural resources which may further contribute to the country's economic recovery.
New parliamentary elections were held on May 26 and June 2, 1996. Amidst charges of voting fraud, virtually all opposition parties pulled out before polling ended and boycotted the second round. The Organization for Security and Cooperation in Europe (OSCE) as well as other U.S. and international election observer missions noted "serious irregularities" during the vote, including voter fraud, ballot stuffing, and intimidation and coercion tactics. OSCE recommended that the Albanian authorities consider partial repetition of the vote in certain constituencies. Other institutions, including the European Parliament and the OSCE parliamentary assembly, have called for new elections. Six opposition parties called for daily demonstrations in Tirana to protest the alleged ballot-rigging. On May 28, riot police violently suppressed a demonstration in Skanderbeg Square, and briefly detained opposition political leaders. President Berisha declared victory over the "Red Front" opposition and refuted charges of voter fraud and manipulation. The Democratic Party won 95 of 115 constituencies in the first round, 6 of 9 in the second round. Berisha agreed to a partial re-run of the elections in 17 districts. Most of the opposition called the move insufficient, demanding a fully new vote, and boycotted the partial re-run. On June 16, all 17 districts went to the Democratic Party, giving it a total of 122 out of 140 seats, or more than a two-thirds majority. The Socialist Party won 10 seats in parliament. The new parliament was inaugurated on July 1, but the Socialist Party boycotted the session. Berisha nominated a new government under Prime Minister Meksi on July 11. The Democratic Party holds 22 out of 25 cabinet posts.
Local elections scheduled for October 20 were widely seen as an opportunity for Albanian to salvage some damaged democratic credentials. President Berisha urged opposition parties to participate but vowed that the vote would be held even if some of them boycotted. Opposition parties meanwhile charged that Berisha was not doing enough to guarantee the fairness of the local elections. In August, Berisha decreed the composition of the central electoral commission, but the Socialist Party boycotted representation on the commission. Council of Europe representatives sought to facilitate roundtable talks on the local elections. Thirteen parties, including the ruling Democratic Party, came to agreement on September 4 on measures relating to electoral procedures, such as the composition of electoral commissions and access to the media.
Days before the vote, the OSCE pulled its observer mission from Albania after the Albanian government refused to accredit all of the OSCE election monitors. Other international monitors from the Council of Europe and the United States remained, and reported no serious incidents or violations on voting day. With about 75% turnout, the Democratic Party won 88% of the municipal vote, and the Socialist Party won less than 10%. The Democratic Party also won a vast majority in run-off contests on October 27. President Berisha praised the results as an affirmation of the May vote.
After many years of almost total isolation, Albania has made significant strides in establishing and improving relations with other countries. Albania joined NATO's Partnership for Peace program in February 1994 and signed its Individual Partnership Program on January 25, 1995. Albania has established institutional links with the European Union, although it is not expected to seek membership in the Union in the near future. Since the borders opened, some 350,000 Albanians (about 10% of the population) have sought refuge and employment abroad, especially in neighboring Greece. Remittances from Albanians working abroad have become a major source of income for the Albanian economy. Albania has also benefitted from substantial levels of foreign aid. Albania became a full member of the Council of Europe on July 13, 1995. The conduct of the May-June 1996 elections has diminished Albania's standing in many European institutions. The OSCE cited many violations and irregularities during the vote. In June, the European Parliament called for new elections to be held, and for cooperation with Albania to be suspended.
Despite some significant progress in its foreign relations, Albania still faces many significant external challenges in the Balkan region. In the north, Albania is concerned about the volatile situation in the formerly autonomous province of Kosovo (in Serbia, bordering Albania), where the 90% ethnic Albanian majority is repressed by Serbia. Ethnic Albanian leaders in Kosovo have claimed independence from Serbia, and some seek eventual union with Albania. President Berisha has urged that the international community become more involved in efforts to resolve the Kosovo issue, without which he predicted no long-term peace in the Balkans. Albania also maintains close ties with ethnic Albanians in the former Yugoslav Republic of Macedonia, some of whom maintain grievances with the Macedonian government.
Albania and Greece have also been at odds over a number of issues, most of which concern Greek complaints about the treatment of Albania's ethnic Greek community and the Greek Orthodox Church, and Albanian fears of irredentist Greek claims to southern Albania. An estimated 200,000 Albanians have been working illegally in Greece. Bilateral Greek-Albanian relations deteriorated substantially in 1993-1994. In August-September 1994, Albanian authorities arrested and sentenced five ethnic Greeks members of the Omonia organization, on charges of espionage and arms smuggling. Greece denounced the arrest and began deporting thousands of Albanian workers. Tense bilateral relations began to ease in 1995. On February 8, 1995, Albanian Supreme Court Justice Zef Brozi suspended the prison terms for the four ethnic Greeks who had been sentenced to 6 to 8 years in prison, opening the way for renewed Albanian-Greek dialogue. On March 13-14, Greek Foreign Minister Karolos Papoulias met with Foreign Minister Alfred Serreqi and President Berisha in Tirana. Both sides expressed their will to overcome the recent difficult period of relations. They discussed the status of the ethnic Greek minority in Albania and Albanian workers in Greece. They also agreed to develop a bilateral friendship treaty by the end of the year. Joint committees were established to work on various aspects of bilateral ties. Greek President Kostis Stephanopoulos visited Tirana on March 21-22, 1996, and signed a bilateral friendship treaty, marking a new beginning in bilateral cooperation.
Until 1991, Albania was one of the few countries in the world with which the United States maintained no diplomatic relations and virtually no contacts. Relations were formally reestablished in early 1991. Then-Secretary of State James Baker's visit to Albania in June 1991 was met with wildly enthusiastic demonstrations in Tirana. After the 1992 national elections in Albania, the State Department expressed support for the Democratic Party-led government and president. Through September 30, 1995, the United States had provided over $100 million in SEED Act assistance to Albania. The United States and Albania signed a bilateral investment treaty on January 11, 1995. In February 1995, President Clinton announced the establishment of an Albanian-American Enterprise Fund, which opened an office in Tirana in August 1995.
Albania's strategic position in the turbulent Balkans has prompted greater defense and security cooperation with the West, and especially with the U.S. military. Many U.S. officials have frequently travelled to Albania to discuss the security situation in the Balkans. In early 1995, the Albanian media reported on messages by President Clinton and Secretary Christopher to the Greek government urging normalization of relations with Albania. President Berisha warmly welcomed U.S. and NATO use of Albanian bases in NATO's implementation force operation in the Balkans. In April 1996, Defense Secretary Perry announced $100 million in military aid for Albania.
On invitation by President Clinton, President Berisha visited Washington on September 11-12. Berisha reported that Clinton was supportive of Albania's concern for Kosovo and favored the restoration of Kosovar autonomy. In October, however, the State Department expressed deep concern about the removal of Chief Justice Zef Brozi, which did not appear to comport with democratic procedures. The State Department's 1995 human rights report for Albania noted that the judicial branch was subject to strong executive and parliamentary political pressures. It also pointed out incidents of police abuse, and restriction on the free press. After the May 1996 elections, the State Department called for all parties to exercise restraint and recommended that the Albanian authorities repeat the elections in certain constituencies. Under-Secretary of State Timothy Wirth travelled to Albania in July, but was refused a meeting with President Berisha. In testimony before Congress, a senior State Department official said that the elections had "cast a shadow on the prospects for democratic progress," that new parliamentary elections should be held, and that the Administration would initiate a thorough review of U.S.-Albanian relations. Similarly, Secretary of State Christopher expressed "disappointment" with the conduct and outcome of the Albanian elections. In August, the State Department called for a broadened political dialogue between the ruling and opposition parties. The State Department characterized the Albanian local elections in October as "reasonably democratic" but called for a popular referendum on a new constitution and new parliamentary elections.