A Royal Leap of Faith.(Bulgaria's new prime minister, Saxe-Coburg-Gotha Simeon II)(Brief Article)

On a September evening in 1946, Simeon II, the 9-year-old boy king of Bulgaria, was hustled by the communist authorities onto a train and into a life of exile. He felt lucky to have escaped with his life. Now he is back. Simeon's reformist party won a landslide election victory in June, and last week he took power as Bulgaria's new prime minister, heading a government composed of young Bulgarian expatriate bankers recruited from jobs in the City and Wall Street. Their task: to jump- start the stagnant Bulgarian economy and catch up with the likes of Poland, the Czech Republic and Hungary. His crash program for recovery includes fast and radical privatization, a corruption crackdown, a new tax code--and very attractive incentives for foreign investment.

Simeon has pledged to improve his peoples' lives within 800 days--not to mention join NATO by 2004, and the European Union not long after. It's a tall order. Bulgaria has fallen far behind its more successful East European neighbors, chiefly by lagging on reform. After 10 years of mismanagement, unemployment is close to 28 percent--rising to 70 percent in rust-belt areas like the steel town of Pernik. Seventy percent of the population lives below the official poverty line. Small businesses (the backbone of any economic recovery) have been strangled by high taxes and corruption. Simeon's new team aims to change all that in a stroke of what Poland once called "shock therapy." As one London banker puts it, "It's a giant experiment in how emerging-markets bankers would run a country, if given the chance."

Six months ago most of the new cabinet were midlevel desk jockeys at London and New York investment houses. Now they're arranging their papers on expansive desks once belonging to top communist apparatchiks. Nikolai Vassilev, a 31-year-old U.S-educated market analyst, was plucked from Lazard Capital Markets to become deputy prime minister and Economy minister. He gained prominence when the previous government, scouting for emigre talent, organized a forum of young Bulgarians who have been working abroad. Like all of the new expatriate team, Vassilev grew up in Bulgaria but left in 1990 to escape the country's spiraling poverty. The new Finance minister, 35-year-old Milen Velchev, has more experience in present-day Bulgaria: he was a specialist in restructuring external debt for Merrill Lynch in London before being hired by the previous government to organize a Eurobond issue for Bulgaria. Simeon's own son, Kyril, a debt specialist at Lazard, may ...