With the images of a destroyed Yugoslavia and a collapsing Albania in the news every day, we badly need some good news from the Balkans. It was brought to us by Stefan Sofiyanski, the interim Prime Minister of Bulgaria, who was in Washington last week. Under his leadership and that of newly elected President Peter Stoyanov, Bulgaria has a second chance at reform, and they urgently need our support.

Only a few weeks ago, Bulgarians were in the streets demanding the resignation of their failed Socialist government and new parliamentary elections. With inflation out of control and severe food shortages in what was once the bread basket of Europe, the Bulgarian people rebelled against the corrupt and incompetent ex-Communists. Elections are now set for April 19, and a victory for the democratic reformers seems assured. Sofiyanski, the reformist mayor of Sofia, heads a caretaker government of experts charged with jump starting the reform process.

They are off to a good start. Tentative agreement has already been reached with the International Monetary Fund on an economic stabilization package, the centerpiece of which will be an internationally supervised currency board which will link the money supply to the country's financial reserves. Subsidies to failing state industries are to be ended, and price controls ended except for a few basic commodities. Privatization will be accelerated and the social security system restructured. The economy is slowly reviving as inflation falls and the Bulgarian currency regains value.

We Americans have a stake in the success of this second effort at creating open markets and democracy in Bulgaria. Our security interests in Europe would be seriously damaged by another failed state in the Balkan peninsula. The US government should

- strongly support Bulgaria in the World Bank and the IMF

- take the lead in rescheduling Bulgaria's debt, so that there is some breathing space for reform

- join the European Union in humanitarian relief, necessitated by the fact that Bulgaria's last government seems to have exported most of last year's grain crop and pocketed the profits

- increase technical assistance and exchanges designed to provide impetus for democratization and economic reforms.

- welcome Bulgaria's decision to apply for NATO membership and hold the door open for their inclusion during a second round of expansion.

- support Bulgarian membership in the European Union and their access to Western markets.

- strengthen our political and cultural ties with Bulgaria to demonstrate our support during this difficult time of transition.

The US private sector can play a role too. Financier George Soros has offered a $25 million interest free loan to be used for medicine and food, and more private humanitarian aid is needed. US business should look for new investment opportunities which would make use of Bulgaria's highly trained work force and strategic location at the crossroads of Europe and Asia. US educational institutions ought to be expanding exchange programs and support for the American University of Bulgaria. The resumption of tourism to this lovely country can provide quick inflows of foreign currency.

The most difficult test must be faced by the Bulgarian reformers alone. They must learn to work together rather than fighting among themselves, as they did when they first came to power. Internal squabbling led to paralysis then, and to the return to power of the former communists. The roots of factional struggle remain strong, and unless the parliament and government elected next month can learn to compromise and share power, there will be a second failure of democratic reform.

The attitude of Bulgaria's newly elected leaders to foreign direct investment will be central to the success or failure of economic reform. Green field investment will do much more to revitalize the economy than privatization of the rusty industrial base which grew in the shadow of the Soviet Union. But the reformers failed the last time around to create the kind of legal and political climate which welcomed foreign investment, perhaps because the Bulgarian people have little experience with private enterprise and wish to closely control it. It is an axiom that capital flows to where it is welcome, and those investors who found themselves enmeshed in red tape and uncertainty during the past five years have gone elsewhere. It will take a major effort to woo them back.

Despite these cautions, the chances that Bulgaria will take advantage of its second chance are good, and the lessons learned at great cost are unlikely to be forgotten this time. With help and encouragement from the US and the EU, Bulgaria can win a place in the new structure of the West.

Note: The authors, former US Ambassadors to Bulgaria, are co-chairs of the Bulgarian American Society, an organization dedicated to promoting democracy and economic reform in Bulgaria