Bulgaria's economy had been left in such bad shape by the departing administration that the new government had little choice but to swallow the medicine offered by the IMF - by now the real power in Bulgarian affairs. An economic austerity programme was introduced, and inflation was brought under control by pegging the lev to the Deutschmark. The privatization of state-controlled industries was speeded up once more, but this only led to renewed accusations that enterprises were being sold off cheap to government supporters, with the officials responsible for negotiating the deals pocketing hefty commission fees. A series of much-vaunted anti-corruption drives aimed to restore public confidence in big business, but often had the opposite effect - those under investigation invariably tended to be linked to the BSP, while SDS supporters escaped scrutiny.

Although unable to control the struggles for power and status within governmental ranks, Ivan Kostov himself was widely respected - especially by Western observers - for his largely successful efforts to stabilize government finances. However, he was a bad communicator, and his long-term vision of a slow but steady return to economic growth cut little ice with the majority of the Bulgarians, who continued to eke out a living on meagre wages