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A
ulgaria's economy contracted dramatically after 1989 with the loss of the market of the Council for Mutual Economic Assistance's (COMECON) member
states, to which the Bulgarian economy had been closely tied to. The standard of living fell by about 40%, but it regained pre-1990 levels in June 2004. In addition, UN sanctions against Yugoslavia and Iraq took a heavy toll on the Bulgarian economy. The first signs of recovery emerged in 1994 when the GDP grew and inflation fell. During 1996, however, the economy collapsed due to lack of international economic support and an unstable banking system. The value of the Bulgarian Lev was fixed to the Deutschmark by the currency control board created in 1997; it is now linked to the Euro. Since then the country has been on the path to recovery, with GDP growing at a 4-5% rate, macroeconomic stability and European Union membership.
Bulgaria has a strong agricultural sector, in which the main products are wheat, maize, barley, sugar beet, grapes and tobacco, although its relative importance has declined in recent years. Attar (oil) of roses is exported from the Valley of Roses near Kazanluk to perfumers across the world. The country is also one of the world's leading wine exporters. Mineral deposits include coal, iron ore, copper, manganese and zinc. Coal, supplemented by gas supplied by pipeline from the Russian Federation, meets most of the country's energy requirements. ___________
Manufacturing industry is concentrated in engineering, metals, chemicals and petrochemicals and, more recently, electronics and biotechnology. Bulgaria is a major producer of bulk carriers and forklift trucks. In the service sector, tourism and road transport are both important foreign exchange earners. In general, Bulgaria has suffered the usual problems experienced by centrally planned economies adjusting to market conditions. Successive governments have followed the path taken by other former Communist governments, under which most of industry and agriculture was privatised, trade liberalised and reforms of the fiscal and banking systems instituted. However, some key privatisations (tobacco, telecoms, banking) have already - or are - experiencing difficulties, possibly threatening the stability of the government. In 1990, Bulgaria joined the IMF, which has had a major influence on the country's
economic policy, along with the World Bank and the European Bank for Reconstruction and Development. The Russian Federation, Germany, Italy and Greece are Bulgaria's major trading partners.

Foreign Relations of Bulgaria
Bulgaria has generally good relations with its neighbors and has proved to be a constructive force in the region under socialist and democratic governments alike. Promoting regional stability, Bulgaria hosted a Southeast European Foreign Ministers meeting in July 1996, and an OSCE conference on Black Sea cooperation in November 1995. Bulgaria also participated in the 1996 South Balkan Defense Ministerial in Albania and is active in the Southeast European Cooperative Initiative.
With their close historical, cultural, and economic ties, Bulgaria seeks a mutually beneficial relationship with Russia, on which it is largely dependent for energy supplies. Sporadic .negotiations
are underway among Greece, Bulgaria, and Russia for construction of a gas pipeline from Burgas on the Black Sea to Alexandroupolis to transport Caspian Sea oil.

Bulgaria's EU Association Agreement came into effect in 1994, and Bulgaria formally applied for full EU membership in December 1995. During the 1999 EU summit in Helsinki, the country was invited to start membership talks with the Union. These are currently completed, and January 1, 2007, has been set as Bulgaria's accession date. In 1996, Bulgaria acceded to the Wassenaar Arrangement controlling exports of weapons and sensitive technology to countries of concern and also was admitted to the World Trade Organization. Bulgaria is a member of the Zangger Committee and the Nuclear Suppliers Group. After a period of equivocation under a socialist government, in March 1997 a UDF-led caretaker cabinet applied for full NATO membership, which became a reality in April 2004. Talks are underway with the United States for possible military bases and training camps of the U.S. Army in Bulgaria, as part of the Pentagon's restructuring plan.

International Organization Participation

ACCT, Australia Group, BIS, BSEC, CE, CEI, CERN, EAPC, EBRD, EU, FAO, IAEA, IBRD, ICAO, ICCt, ICFTU, ICRM, IFC, IFRCS, IHO (pending member), ILO, IMF, IMO, Interpol, IOC, IOM, ISO, ITU, MIGA, NAM (guest), NATO, NSG, OAS (observer), OPCW, OSCE, PCA, UN, UNCTAD, UNESCO, UNIDO, UNMEE, UNMIK, UNMIL, UPU, WCL, WCO, WEU (associate affiliate), WFTU, WHO, WIPO, WMO, WToO, WTO, ZC.

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