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7 Balancing Between Socialist Internationalism and Economic Internationalisation Bulgaria’s economic contacts with the EEC Elitza Stanoeva During his first visit to Bonn in 1975, Todor Zhivkov, Bulgaria’s party leader and head of state for nearly two decades, met an assembly of West German entre- preneurs, and not just any, but the top management of powerful concerns such as Krupp and Daimler-Benz – ‘the monopolies and firms which control 50% of the economic potential of the country’, as argued in the lauding report on the visit afterwards submitted to the politburo of the Bulgarian Communist Party (Balgarska komunisticheska partiya [BKP]).1 Five pages later, the same report highlighted Zhivkov’s witty retort to an SPD politician: ‘Regardless of whether the elections are won by the social democrats or the Christian democrats, Beitz, the boss of Krupp, who represents capitalism in Germany, will remain in place’.2 The irony of criticising West German politicians for being in cahoots with the corporate world while trying to strike a deal with the very same corporations passed unnoticed. After all, Zhivkov went to Bonn to do business, namely to give a boost to the strained Bulgarian economy by securing a long-term loan from the West German government. In this mission, which ultimately failed, he did not shy away from reaching out to the corporate milieu with promises of high profits in the Bulgarian market. Neither did he shy away from depicting his native socialist economy as one overpowered by ‘trade unions, party organisations and the like whom even we cannot cope with’ – in order to divert West German requests for direct investment options.3 Rather than being an anecdote on political duplicity, Zhivkov’s conflicting statements, admittedly aimed at different audiences, illustrate the duality in Bul- garia’s policy of doing business with the West as a balancing act between socialist internationalism and economic internationalisation. This was particularly the case with regard to Bulgaria’s interactions with the European Economic Community (EEC), where separating political and economic issues became increasingly dif- ficult in the 1970s. And while a political compromise would have been a step too far, the economic benefits were indispensable. From the 1960s onwards, pur- chases from EEC members provided technology and manufactured inputs that were essential for the modernisation of Bulgarian industry. The party perceived this as a prerequisite for participation in the international division of labour, 160 Elitza Stanoeva which would be evidence of the growing international prestige of socialist Bul- garia. As the country was devoid of raw materials that could generate demand in world markets, it was in dire need of state-of-the-art factory production that could be competitive in international trade. Although Bulgarian industry repeat- edly failed to optimise the benefits of costly technological transfers, it grew ever more dependent on Western imports and craftier in requesting their delivery from the state leadership. To expand exports was therefore a primary aim of all purchases from the capital- ist economies, while improving domestic consumption was relegated to domestic manufacturers. Unlike Poland, Bulgaria, which was still running a predominantly agricultural economy, never experienced food shortages and price spikes of food- stuff, so direct imports for domestic consumption never became urgent.4 As in the rest of the bloc, the Bulgarian regime attached priority to consumption from the 1960s onwards but improving it was pursued through domestic economic reforms aimed at raising quality and increasing variety.5 Therefore, the share of imported consumer goods remained negligible up until 1989. In 1956, ‘means of produc- tion’ accounted for 93% of Bulgaria’s imports (against 7% for consumer goods) and they never dropped below 86% in the decades to come.6 Moreover, imported consumer goods were sold mainly through hard-currency shops, Corecom, and the international tourism system so they were not bound to the social policy of raising standards of living for the population at large but to the needs of Bulgarian foreign trade.7 In the literature on the Eastern bloc, the People’s Republic of Bulgaria (Narodna republika Balgariya [NRB]) is usually portrayed as the most loyal follower of the Soviet line (or even as a ‘Soviet locum tenens’),8 an orthodox satellite that in the Cold War gave up any autonomous pursuits on the international stage. In the perspective of its foreign economic pursuits, what is more remarkable about Bulgaria’s standing within the bloc, however, is its internalised perception of hav- ing secondary importance in the eyes of the West. This frustrated self-image as a provincialised periphery no doubt had deeper historical roots than state socialism. But in the post-war period, Bulgaria’s new geopolitical position in the Soviet sphere of influence put it at a more pronounced disadvantage vis-à-vis the Central European states than previously within its region. This gave new urgency to its catching-up endeavour on the European stage. While arguably all the socialist regimes were in one way or another torn between fraternal solidarity and mutual competition in their opening up to the West, for Bulgaria this rivalry, from a position of recognised weakness, was a determining dimension in its foreign policy. And Bulgaria’s competitive weakness prompted the regime to cover all bases: on the one hand it provided incentives for expanding and diversifying bilateral partnerships with the West and on the other hand for maintain- ing tight bonds with the Soviet Union. Regarding the latter, Bulgaria could always rely on economic benefits in exchange for political loyalty. While these benefits seemingly came for free, they further hampered Bulgaria’s outreach to the West. Exacerbating its competitive disadvantage was the fact that unlike the rest of the bloc, Bulgaria had very few traditional partnerships with Western Europe that Bulgaria: Balancing Internationalism 161 it could easily reactivate once opening up was possible after de-Stalinisation. With a low level of industrialisation and agricultural mechanisation and scarce natural resources, its feeble economy was doomed to fare worse than the oth- ers in the Eastern bloc. Ultimately, it lacked both geopolitical importance and substantial economic resources to increase its attractiveness to potential Western partners. But its fledgling economy matched the needs of Soviet commerce better than others and so added economic rationale to Bulgaria’s heavy dependency on the Soviet Union. Being the most export-oriented country in the bloc (rela- tive to its GDP), Bulgaria was also the one bloc member that relied the most on the Council for Mutual Economic Assistance (CMEA) market, and primarily on the Soviet Union.9 Economic transfers with the latter notwithstanding, Bulgar- ian industry gradually developed a strong dependency on high-tech inputs from capitalist countries. In this regard, trade with the EEC was vital, despite sporadic attempts to reduce costly imports from its members in order to keep the balance of payments in check. Throughout the period, Bulgaria suffered from endemic trade deficits in the free market, and although it strove to offset this by prioritising sales of machinery and other heavy industry outputs, its agricultural production dominated the composition of its exports. Ultimately, this led the regime into a debt spiral due to its constant demand for credits from foreign banks and firms.10 Against this backdrop, from the early 1960s onwards opening up to the West was an imperative for the Bulgarian regime that at no point diminished regard- less of Cold War geopolitics. Naturally, the socialist establishment did not use the phrase “opening up to the West” to describe its policy of cooperation with capital- ist countries. While this was certainly a catchphrase in the writings of Western commentators at the time, the socialist rhetoric depicted the process in terms of peaceful coexistence. Both phrases were politically charged and with normative connotations: while the former conveyed the West’s self-understanding as the centre of gravity in the process, the latter expressed the socialist camp’s self- confidence in leading initiatives securing world peace. This interpretative split goes a long way to explaining why the Bulgarian establishment had neither ideo- logical problems in pursuing a course of “opening up” nor serious discords with Moscow over the scope of its openness (as Romania did).11 Any milestone in that regard served the regime’s self-legitimation as proof of the country’s growing international prestige. Domestic propaganda along these lines was framed by the party dogma that the Cold War was the sole responsibility of the West due to its antagonism towards the socialist bloc over its being at the forefront in the struggle for world peace. In tackling Bulgaria’s opening up to the West in the “long 1970s”, this chapter breaks away from several fundamental assumptions pervading much of the post- 1989 national historiography of the socialist era where the totalitarian paradigm still occupies central place. First and foremost, it contests the notion of a party- state monolith which takes for granted that the party top made all the important decisions and the state institutions had a passive role in their execution with no policy initiative. The role of a few individuals (mainly Zhivkov) is often exag- gerated along with their capacity for comprehensive oversight. The same applies 162 Elitza Stanoeva to Zhivkov’s closest circle, the politburo, which de facto constituted the party apex. Nevertheless, its concentration of powers did not necessarily translate into decision-making initiatives: much of the policymaking discussed in this chapter was done in the state ministries despite it requiring formal authorisation by the politburo. With nine to twelve members throughout the period, the party top brass could have only partial oversight and, moreover, it had limited economic compe- tence for more active involvement in steering the foreign-economic course of the country.

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