On 29 December 1998 four political parties gathered in Sofia's National Palace of Culture to proclaim the formation of the Liberal Democratic Union (LDU). They were The Movement for Rights and Freedoms (MRF) led by Ahmed Dogan, the New Choice Party of Dimitar Ludzhev, the Liberal Democratic Alternative headed by ex-president Zhelev and the Free Radical Democratic Party (FRDP) led by N. Boyadzhiev and Mikhail Nedelchev. The constituent congress, attended by 1002 delegates, adopted the statutes, elected the governing bodies, and passed resolutions on the freedom of speech, local government and Bulgaria's Balkan policy. Present were many ambassadors, representatives of the Friedrich Naumann Foundation, figures like P. Dertliev, Prof. K. Petkov, A. Tomov. There was no representative of the UDF, so that M. Nedelchev proposed a three-minute silence to replace UDF's greetings. Zh. Zhelev was elected honorary president, and it was decided for the LDU itself to have a Council of Heads consisting of the leaders of the member parties. Each one of them is entitled to take the lead for one year on a rotation principle. During its first year the LDU will be headed by Ahmed Dogan. The parties forming the Union will retain their Identity and organizational structures.

The statutes approved by the congress are of a rather authoritarian character. No mechanisms have been provided by its regulations for ensuring leading positions of the honorary president, or patron, except in "updating the ideological platform of the LDU". Even in the international relations the patron has been granted only decorative functions as compared to those of the President of the Council of Heads. In contrast to all other parties and organizations in Bulgaria in which the important and consequential decisions are taken by delegates of the membership, in the LDU all vital decisions are to be made by the Council of Heads. The Council of  Heads or the leaders of the four member parties shall make all "decisions about joint action and events", as well as "confirm nominations for deputies, mayors and municipal councillors." It is again the Council that is entitled to decide all moves concerned with coalitions, alliances or political confrontation on the strategic and tactical levels.

Of all four parties it is the MRF that is most concerned with "preserving the identity and specific structures" of each of the member parties. Within the framework of the LDU the Liberal Alternative led by Zhelev and the FRDP headed by M. Nedelchev seek publicity and lasting presence on the political scene through parliamentary represented MRF and New Choice. They, in turn, aspire to international recognition and financial and other kind of assistance by the Liberal International through Zh. Zhelev who is its individual member.

Among the LDU member parties, only the MRF is a genuine and serious political formation which possesses a firm and disciplined core constituency of 6-8 per cent. The political weight of the rest of the parties in the LDU is only symbolic, but with the establishment of the Union they have obtained substantial presence in political life and the media being well-aware that the MRF plays the role of a "space launcher" for them.

Throughout 1998 the MRF, and Dogan himself, were subjected to severe attacks on the part of the UDF. UDF's attempt to provoke a split in the MRF by starting the Movement for Reforms in the  MRF led by Gyuner Tahir has ended in failure. Then quite suddenly in the height of this attack, and contrary to the decisions of UDF's National Conference, in early November 1998 Ivan Kostov proposed partnership to the MRF in the coming local elections, which was immediately declined by Dogan.

At LDU's constituent congress Zh. Zhelev made the following statement concerning the UDF: "This UDF is not a UDF at all, for it is not a Union of political parties and organizations, but a monolithic right-wing Christian Democratic Party; it is not Democratic, because it has already encroached upon all the democratic achievements of the UDF founded in December 1989 by being involved in infringements upon the freedom of speech, censorship over the media, dismissals of journalists; intrusion upon local government -- attempts to replace the election of mayors with mayoral appointments; intrusion upon the independent judiciary power, attempts at putting it under the control of the executive power; a new expansion of the state to the detriment of civil society, and so on. Zh. Zhelev proclaimed LDU to be the successor of the original UDF.

The officially declared aim of the LDU is to break the bipolar political model existent in Bulgaria. The LDU sets itself the aim to become the third political centre in addition to the Christian Democrats and the Social Democrats. LDU will keep trying to prevent both the UDF and the BSP from winning more than 50 per cent of the parliamentary electoral votes. D. Ludzhev once said that "UDF and BSP have common ambitions to affirm a deformed bipolar model in the spirit of the Balkan clientele tradition". Therefore this goal is more important for the LDU than removing the UDF from power. In December 1998 Dogan figuratively likened the BSP to "the big snake" and UDF to "the small snake", adding that "coalitions with the UDF are almost impossible" and "absolutely out of the question [is] partnership with the BSP alone". The immediate task of the LDU is good performance in the upcoming elections. In Dogan's opinion, "the fate of the ruling majority will depend" on them. With its constitutive congress the LDU began its campaign for the municipal elections. Particularly interesting is Dogan's prognosis about them. According to him, of all 262 municipalities the BSP has control in 180, the MRF -- in 26, and the rest of the parties  -- in less than 20. The BSP can in fact keep as many as 70-80 municipalities in a direct vote, the MRF, in turn, can feasibly contest for about 30 and also has a 5-25 per cent electoral support in more than 60 municipalities. Whereas two thirds of the municipalities now controlled by the UDF have been won with MRF help. On the political market there will be some 120 contestable municipalities where victory will depend on the combination of interests of the particular political forces and on the candidates for the single-member mayoral seats.

Even if this prognosis does not prove to be perfectly accurate, although it has not been denied so far by anybody, it has determined to some extent the change in UDF's tactics towards the MRF.
The LDU have proclaimed as their natural ally and coalition partner the Social Democrats outside the UDF -- the Social Democracy Union /SDU/ formed by P. Dertliev and Prof. K. Petkov /ULB/, and the Euro-Left headed by A. Tomov. In their effort to establish themselves as a third national power, without which nobody would be able to rule the country, the LDU seeks through skilful manoeuvring in the left-wing space with the help of the Social Democrats to bring about the final dismantling of the BSP and reduce its representation in the National Assembly to 10-15 per cent. At the same time, the LDU will try to replace the UDF in the government as early as the next parliamentary elections by first defeating it in the local elections to be held this year.

In pursuance of this objective, on 17 January 1999 the leaders of the LDU, SDU, the Euro-Left and the BSP decided that by the end of March they would work out a joint alternative programme for the country's government. In this way they laid the foundations of the unification of the opposition and delivered a blow on UDF's assertion that their government has no alternative. On 4 February the leaders of the LDU, the SDU and the Euro-Left signed a joint declaration on united action in the forthcoming municipal elections. They are supposed to consult with one another about their nominees for mayors and, under certain conditions, about the candidatures for municipal councillors. Zh. Zhelev announced this to be the beginning of the end of the bipolar model. K. Petkov pointed out that "those in power themselves have chosen to stand alone in opposition to all others." In M. Nedelchev's opinion, this declaration is also a guarantee for the isolation of the BSP from political life. D. Ludzhev declared he did not agree that the LDU should be used as a pretext for drawing closer to the BSP referring to Euro-Left attempts to mediate LDU-BSP contacts. Certain change in attitude can be seen among the LDU member parties towards the BSP stemming not only from the necessity of joint action to be undertaken by all opposition forces. The LDA and the FRDP are sticking to their firm stand against the BSP, while the position of the New Choice party is a bit more subtle and differentiated.

In late November 1998 Dogan ruled out any agreement with the BSP, but allowed one with the UDF as a last resort. Following the talks at the National Security Council meeting headed by the President, on 3 January Dogan renounced the possibility of a dialogue with the UDF, since the UDF perceived it only in the light of the army-service principle: "When you are talking to me, you have to be silent!".

On 4 February, for the first time after 10 November 1989, the leaders of the BSP and the MRF met and reached an agreement on the Framework Convention on Minority Rights. It is quite obvious that Dogan is in the process of making a "left turn" actively stimulated by Gheorghi Parvanov's flexible policy. For Dogan the UDF is now "the big snake" and in the local elections, in his own words, he is ready to "make a deal with the devil himself" (i.e. with the BSP).

Dogan's policy towards UDF's partners in the ADF, particularly the Bulgarian Agrarian National Union /BZNS/ led by Anastasia Moser is also a flexible one. Both parties have announced that in the municipal elections they are willing to cooperate in certain places. At the same time, one should not disregard the existing controversies within the LDU, and the lacking well-defined political agent and well-outlined political model in its public message. The differences and disagreements will surely grow in the process of the apportioning of the opposition-minded electorate and especially while nominating the mayoral candidates.

It became clear on 5 February that the LDU had been granted an observer status in the Liberal International /LI/. LI's functionaries must be somewhat disappointed because they have expected a united Liberal party, rather than a union, to be created. Nevertheless, the LDU has been internationally recognized and, as a result, financially and in any other way supported by the LI.
It is safe to say that the LDU has attained its permanent place on the political scene and in the media. The LDU is already a factor which both the UDF and the BSP should reckon with.