Bulgaria's socialist economy was beginning to stall well before the emergence of perestroika in the Soviet Union began to raise fundamental questions about the continuing viability of the whole system. Summer droughts in 1984 and 1985 had harmed agriculture and reduced hydroelectric power (which usually accounts for much of Bulgaria's supply) at a time when Soviet oil supplies were cut back, causing widespread energy shortages. Prices skyrocketed with hardly any corresponding wage increases, and for the first time in many years a note of testiness entered Bulgaro-Soviet relations.

As Gorbachev increasingly toyed with the idea of wide-reaching reform in the USSR, the hardline leaders of his Soviet bloc allies became more and more of an embarrassment. Zhivkov was particularly unpopular with the new Soviet leadership, not least because they found his anti-Turkish policies repugnant. Aware of this, high-ranking Bulgarian officials began jostling for position in preparation for the day when they could (perhaps with Gorbachev's backing) oust their ageing leader. However, they had to wait until the end of the decade for their opportunity to do so