This might sound nuts. But the answer to Europe's programmer shortage could be . . . Bulgaria. That's what financier George Soros is hoping. He's investing in a new IT services company that's offering Bulgarian programming talent at cheap prices to companies in Europe and the United States.

Why Bulgaria? Because it's what passed for the Silicon Valley of the old Soviet bloc. The collapse of the Soviet system left this largely rural country in southeast Europe with a surplus of underemployed but highly skilled programmers.

"One of Bulgaria's biggest assets is its high-tech people," says Christopher Hansen, CEO of the new company, which is called Rila Software after Bulgaria's tallest mountain. Rila has not yet signed any deals, says Hansen, but he's talking to prospective clients impressed by the talent he can offer. "It's neat to be able to find people so easily. That's not the situation you find in the States. And these people want to work. They're psyched to work."

Bulgaria has not been at the cutting edge of software development in the post-cold war era, but ironically that makes its programmers particularly well equipped to deal with one of the toughest software challenges facing Western European firms today — the millennium bomb. The reason is that the majority of Bulgarian programmers are still comfortable using cobol, the computer language used to write many of the programs that contain the year 2000 problem but long since abandoned.

This technological time capsule was buried during the days of the old East bloc, in which each Soviet satellite had an economic specialty. Moscow decreed that Bulgaria would be the region's software center and the government waived unpopular military service for those in high-tech fields. Schools pressed children into science and mathematics, and got results. When the Soviet system collapsed, it left a lot of Bulgarian programmers with too much time on their hands. The country gained a nasty reputation as an exporter of viruses — the creator of the notoriously destructive Dark Avenger virus is thought to be Bulgarian. And many talented programmers started to leave.

The Hungarian-born Soros noticed this trend, and thought about starting a company like Rila. Hansen's job now is to drum up business for Bulgaria. Says Hansen: "My hope is that in three to five years Bulgaria will be to Europe what India is to America — an offshore software development site with cheap, educated and English-speaking programmers. But our advantage over India is that the time difference between Bulgaria and most of Europe is only one hour."