The Crises of the 1930s
Political Disorder and Diplomatic Isolation
The world economic crisis that began in 1929 devastated the Bulgarian economy: the social tensions of the 1920s were exacerbated when 200,000 workers lost their jobs, prices fell by 50 percent, dozens of companies went bankrupt, and per capita income among peasants was halved between 1929 and 1933. A wave of strikes hit Bulgaria in 1930-31, and in 1931 the Liapchev government was defeated in what would be the last open election with proportional representation of parliamentary seats.
Liapchev's coalition fell apart, his defeat hastened by the rise of a supra-party organization, Zveno - a small coalition with connections to most of the major Bulgarian parties and to fascist Italy. The main goal of Zveno was to consolidate and reform existing political institutions so that state power could be exerted directly to promote economic growth. After 1931 Zveno used the economic crisis to instill this idea in the Bulgarian political system. In 1931 the new government coalition, the People's Bloc, readmitted the BANU in an attempt to reunite Bulgarian factions. But the BANU had become factionalized and isolated; its representatives in the coalition largely pursued political spoils rather than the interests of their peasant constituency.
Meanwhile, the Macedonian situation in the early 1930s blocked further attempts to heal Balkan disputes. Four Balkan conferences were held to address the Macedonian problem; but Bulgaria, fearing IMRO reprisals, steadfastly refused to drop territorial demands in Macedonia or quell Macedonian terrorist activities in the region. Such activities had continued under all Bulgaria's postwar governments, but the People's Bloc was especially inept in controlling them. The situation eventually led to the Balkan Entente of 1934, by which Yugoslavia, Greece, Turkey, and Romania pledged to honor existing borders in the Balkans. For Bulgaria the isolation inflicted by this pact was a serious diplomatic setback in southeastern Europe.
In 1932 Tsankov founded Bulgaria's first serious fascist party, the National Socialist Movement, which imitated the methods of Hitler's Nazi party. Although Tsankov's party never attracted a large following, its activities added to the chaotic fragmentation that forced the People's Bloc from power in May 1934.
Fragmentation of the People's Bloc coalition and the threat posed by the Balkan Entente led Zveno and various military factions to stage a right-wing coup. Under the leadership of Colonel Velchev and Georgiev, the new prime minister, the new government began taking dictatorial measures. The government also took immediate steps to improve relations with Yugoslavia and made overtures to Britain and France. Diplomatic relations resumed with the Soviet Union in 1934, despite a marked increase in internal repression of communists and suspected communists. A concerted drive by the Bulgarian military against IMRO permanently reduced the power of that organization, which by 1934 had exhausted most of its support in Bulgarian society. The fact that sponsorship of Balkan terrorism finally ceased to hinder Bulgarian foreign policy was the single lasting contribution of the Velchev-Georgiev government.
The Zveno group abolished all political parties, citing the failure of such institutions to provide national leadership. The press was muzzled. Henceforeward the state would be authoritarian and centralized; the assembly would represent not political parties but the classes of society: peasants, workers, artisans, merchants, the intelligentsia, bureaucrats, and professionals. Velchev also proposed a wide-ranging program of social and technical modernization. In 1935, however, Tsar Boris III became an active political force in Bulgaria for the first time. Disillusioned by the results of the 1934 coup, Boris III took action to regain his power, which the new regime had also curtailed. Boris used military and civilian factions alarmed by the new authoritarianism to maneuver the Zveno group out of power and declare a royal dictatorship.
The Royal Dictatorship
In the years following 1935, Boris III relied on a series of uncharismatic politicians to run Bulgaria, weaken the political power of Zveno and the military, and keep other factions such as the BANU, the communists, and the national socialists from forming alliances against him. Boris III chose not to restore the traditional political supremacy of the assembly and ignored demands by many public figures to write a new Bulgarian constitution. In 1936 a broad coalition, the People's Constitutional Bloc, brought together nearly all leftist and centrist factions in a nominal opposition that had the blessing of the tsar. Boris III delayed holding a national election until 1938. At that time, only individual candidates were allowed in a carefully controlled election procedure that excluded party candidate lists. Boris III claimed that domination of the new assembly by pro-government representatives justified his nonparty system, although the People's Constitutional Bloc seated over sixty delegates. Elections in the next two years were strictly limited in order to maintain Boris's control over his parliament.
The Interwar Economy
In the years between the world wars, Bulgarian efforts to raise agricultural and industrial standards closer to those of Western Europe yielded uneven results. Until the mid-1930s, political unrest, steep reparations payments, and the world financial crisis stymied growth. Reparations payments were finally canceled in 1932, however, and the stability of the royal dictatorship brought economic improvement in the late 1930s. Half the European average in 1930, per-capita agricultural production improved markedly when government control forced diversification, new methods, and new markets into the system. In the 1930s, a 75 percent increase in membership of agricultural cooperatives bolstered the financial stability of the agricultural sector, particularly benefiting small landholders. The most notable agricultural trend between the wars was the switch to industrial crops, especially tobacco, which replaced wheat as Bulgaria's top agricultural export. The predominance of small agricultural plots increased, however; in 1944 only 1 percent of holdings were over twenty hectares, while the number of landless families had decreased.
In the 1930s, Germany bought a huge percentage of Bulgaria's agricultural exports (67.8 percent in 1939), reinforcing economic dependency by selling finished industrial products for nonconvertible currency - a distinct advantage for the Bulgarian economy and a boon to the Bulgarian standard of living. Boris III tried to balance German trade by expanding British and French markets, but he found little interest in either country. Although industry remained distinctly secondary to agriculture, contributing only 5.6 percent of the Bulgarian gross national product in 1938, between 1929 and 1939 Bulgarian industry grew at an average rate of 4.8 percent, well ahead of the European average for the period. The role of state-owned enterprises dwindled steadily in the 1930s; by 1944, only coal mines, electrical power, railroads, and banks remained predominantly in that category. While large state-sponsored enterprise diminished, small private industries flourished in the 1930s. At the same time, Bulgarian commerce became largely state-controlled and centralized in Sofia, and the social and political dichotomy between rural and urban Bulgaria was even sharper as WWII began.
Foreign Policy in the Late 1930s
By 1939 Bulgaria had moved inexorably into the fascist sphere of Germany and Italy. The country was tied to the former for economic reasons and because Germany promised territorial revision for Bulgaria, and to the latter because Boris III was married to the daughter of King Victor Emmanuel III of Italy. In the late 1930s, Bulgaria continued to seek rapprochement with Yugoslavia; a friendship treaty was signed in 1937, and a renunciation of armed intervention in 1938. When Germany took the Sudetenland from Czechoslovakia in 1938, it ended the anti-German Little Entente alliance of Yugoslavia, Czechoslovakia, and Romania and pushed Yugoslavia closer to Bulgaria. When WWII began in IX/1939 with the German invasion of Poland, Bulgaria declared neutrality, but this position was inevitably altered by big-power relationships.
The Nazi-Soviet alliance of 1939 improved Bulgaria's relations with the Soviet Union, which had remained cool, and yielded a Bulgarian-Soviet commercial treaty in 1940. The pro-Western Bulgarian Prime Minister Kioseivanov was deposed that year in favor of pro-German Filov, who reduced cultural ties with the West and instituted a Nazi-type youth league. Meanwhile, Boris III strove to maintain neutrality, rejecting Soviet treaty offers in 1939 and 1940. Boris III also rejected membership in the Balkan Entente and in a proposed Turkish-Yugoslav-Bulgarian defense pact, because such moves would anger Italy, Germany, the Soviet Union, or all three. Under pressure from Hitler, Romania ceded southern Dobruja to Bulgaria by the Treaty of Craiova in 1940. Needing Bulgaria to anchor its Balkan flank, Germany increased diplomatic and military pressure that year. The massing of German troops in Romania prior to invading Greece removed all remaining flexibility; aware that German troops would have to pass through Bulgaria to reach Greece, Bulgaria signed the Tripartite Pact with Germany and Italy in March 1941.
Information is from http://lcweb2.loc.gov/frd/cs/
