Staff-prepared summary of the East European Studies discussion with John Lampe, the Chair and a Professor of History at the University of Maryland, MD.

Dr. Lampe emphasized the importance of Bulgaria's successful integration into Europe for the region and argued that Bulgaria has the potential to be the model for its neighbors in Southeast Europe. He expressed an optimistic outlook on Bulgaria's future and noted that it is in the country's national interest to concentrate on meeting NATO's and the EU's conditions for membership.

To provide a bit of historical background, Dr. Lampe began his talk with a discussion of three sets of competing traditions that have been part of Bulgaria's history since its creation in 1878. First, Bulgaria's institutional structure is one of centralization (with control concentrated in Sofia and no experience with federalism) and clientism (with an emphasis on compromise and connections at the local level). Second, its ideology is marked both by egalitarianism - reflected in a high level of religious tolerance - and by intolerance reflected in sharp ethnic, class and party divisions. Third, Bulgaria's national identity, which has historically contained defensive and defeatist elements and is now evolving to include a desire to be more connected to Europe though the feelings of distrust and hopelessness remain.

Dr. Lampe identified structural/institutional and educational problems as significant challenges for Bulgaria. Institutionally, Bulgaria has a weak presidency and an ineffective, fragmented public administration (with too few capable and honest public officials, and too many with dubious ties to Sofia). Educationally, Bulgaria is spending at a rate of only 40% of its 1990 expenditures - the lowest in Europe. Enrollment is down in primary and secondary schools, schools in cities are overcrowded, and the country has too many higher educational facilities. And, Bulgaria has a high unemployment rate, reaching about 17%. Even more ominous are the demographic challenges facing Bulgaria, which has seen a precipitous drop in population during the past decade from 8.9 million in 1991 to 7.9 million in 2001, due primarily to emigration and low birth rates.

Yet, despite these challenges, Bulgaria has enjoyed significant progress. Among its macroeconomic success, Bulgaria's exchange rate has remained steady without overvaluing the currency or hurting Bulgarian exports; inflation is at 6%; the government deficit is less than 1%; the current account deficit is at only 4% of GDP; exports are up, imports are down; a 3.3% increase in GDP is expected for this year; foreign direct investment is at $800 million per year - still low, but improving; and 80% of the banking industry is in private hands.

To help Bulgaria maintain these positive trends, Dr. Lampe believes that international recognition and support is crucial. The United States, the World Bank and IMF must continue to provide direct assistance. In a sense, Bulgaria's economic and political transition cannot be allowed to fail. Countries such as Serbia and Macedonia are directly affected by Bulgaria's situation and its success. If Bulgaria fails, we could witness the development of a black hole in the region that could envelop even Greece, Hungary and Central Europe.