Claim: Bulgaria is a market-based economy.

Bulgaria -LRB- -LSB- bʌlˈɡɛəriə , _ bʊl - -RSB- България , tr . -RRB- , officially the Republic of Bulgaria -LRB- -LSB- Република България , links = no -RSB- , tr . , -LSB- rɛˈpublikɐ bɐɫˈɡarijɐ -RSB- -RRB- , is a country in southeastern Europe . It is bordered by Romania to the north , Serbia and Macedonia to the west , Greece and Turkey to the south , and the Black Sea to the east . With a territory of 110994 km2 , Bulgaria is Europe 's 16th-largest country .   Organised prehistoric cultures began developing on current Bulgarian lands during the Neolithic period . Its ancient history saw the presence of the Thracians , Greeks , Persians , Celts , Romans , Goths , Alans and Huns . The emergence of a unified Bulgarian state dates back to the establishment of the First Bulgarian Empire in 681 AD , which dominated most of the Balkans and functioned as a cultural hub for Slavs during the Middle Ages . With the downfall of the Second Bulgarian Empire in 1396 , its territories came under Ottoman rule for nearly five centuries . The Russo-Turkish War of 1877 -- 78 led to the formation of the Third Bulgarian State . The following years saw several conflicts with its neighbours , which prompted Bulgaria to align with Germany in both world wars . In 1946 it became a one-party socialist state as part of the Soviet-led Eastern Bloc . In December 1989 the ruling Communist Party allowed multi-party elections , which subsequently led to Bulgaria 's transition into a democracy and a market-based economy .   Bulgaria 's population of 7.2 million people is predominantly urbanised and mainly concentrated in the administrative centres of its 28 provinces . Most commercial and cultural activities are centred on the capital and largest city , Sofia . The strongest sectors of the economy are heavy industry , power engineering , and agriculture , all of which rely on local natural resources .   The country 's current political structure dates to the adoption of a democratic constitution in 1991 . Bulgaria is a unitary parliamentary republic with a high degree of political , administrative , and economic centralisation . It is a member of the European Union , NATO , and the Council of Europe ; a founding state of the Organization for Security and Co-operation in Europe -LRB- OSCE -RRB- ; and has taken a seat at the UN Security Council three times .