Disciplining the ‘black sheep of the Balkans’: financial supervision and sovereignty in Bulgaria, 1902–38

Using the example of Bulgaria, we argue that familiar models of international political economy fail to capture the tension between national sovereignty and access to capital markets experienced by peripheral debtors in the late nineteenth and early twentieth centuries. Existing accounts exaggerate the significance of the gold standard as a good housekeeping seal of approval and underestimate the role of direct financial controls. Furthermore, they underestimate the linkage in zones of inter-imperial rivalry, such as the Balkans, between foreign borrowing and strategic alignment. We show how Bulgaria found its politics destabilized prior to 1914 by the demands of its creditors. After defeat in the First World War, Bulgaria was forced to submit to an even tighter system of creditor control. Though it obtained substantial debt relief during the 1930s, these concessions were gained not through an assertion of national sovereignty and default, but at the price of even closer supervision. This in turn casts new light on the conventional view of Bulgaria as a victim of Nazi ‘informal imperialism’. In light of Bulgaria’s previous experience, the more striking feature of its trade relations with Hitler’s Germany is that they were conducted on a basis of sovereign equality.