Unleashing a second wave of economic reform

Nikolay Vassilev, Bulgaria's deputy prime minister and economy minister, rushes back into his office shortly after midnight on a Friday, having been locked in meetings all day. His dinner is a McDonald's hamburger and chips, forced down as he begins yet another meeting. Bulgaria makes very different demands to those Vassilev faced when he was a London-based investment banker. However, he remains enthusiastic.

"Reform reached the point of no return a year ago. The majority of assets are in private hands and nearly three-quarters of all business is done by the private sector," he says.

More important this optimism is shared by international investors and investment bankers, who see Bulgaria, along with Romania, as the next convergence plays. Bulgaria has tapped the Euromarkets twice in the past couple of years and the bonds are trading at tight levels.

Bankers say the country's bonds will continue to be in demand though there...