Sofia was founded 3,000 years ago, by an ancient Thracian tribe, the ‘Serdi', and known as Serdica until the beginning of the ninth century. Dramatically ringed by the Balkan Mountains to the north and the Vitosha Mountains to the south, the capital stands on an open plain 550m (1,804ft) above sea level in western Bulgaria.

The town centre is dominated by neo-classical Stalinist architecture and is surrounded by a sprawling periphery of bleak, Socialist-era block housing - a formidable greeting for the first-time visitor. However, a peek through the side streets and century-old commercial quarter reveals the true magic of Sofia - a very European city of tree-lined boulevards and balconied buildings by 19th-century Russian and Viennese architects. Standing among a cluster of ancient and neo-Byzantine Orthodox churches, and one functioning mosque, which is virtually all that remains of 500 years of Ottoman domination.

However, it is in street life that the character of the city is to be found. Locals meet for coffee at open-air cafés, vast bazaars offer an array of pickles and farm produce, gypsies sell flowers on street corners, while shoppers queue to board the city's rattling trams and folk musicians serenade the metro users.

From the earliest times, Sofia's main attraction has been its thermal springs, which are still in public use today as a water source. Its strategic location on military and trade routes made it an important administrative centre in Roman times, reaching its grandeur as an early centre of Christianity during the reign of Constantine in the fourth century.

Two significant Byzantine churches remain. In 1382, the Turks conquered the city but when they were ousted, in 1878, Sofia became the capital and its grand boulevards were constructed, cutting through the grid-plan quarters that had grown up around the oriental nucleus. Ottoman-imposed mosques were torn down, as the Orthodox Church was reinstated.

During WWII, Bulgaria became part of the Axis and Sofia was heavily bombed in British and American raids - 3,000 buildings were destroyed and 9,000 damaged, which accounts for its newness today. When the war ended in 1944, Russian soldiers took the capital and Bulgaria became part of the Eastern Bloc.

Under Communism, Sofia underwent a period of rapid industrialisation - new factories and high-rise apartment blocks grew up to form extended suburbs and the city's population escalated as thousands migrated from rural areas. The regime officially came to an end in 1989, although it remains the most obvious legacy in contemporary urban culture and architecture. Despite these impositions, Sofia retains and is reclaiming its sense of European elegance and identity.

Politically and economically, however, Bulgaria continued to suffer from the vacuum left by Communism. The 1990s saw chaotic political instability, soaring unemployment, hyperinflation and rampant corruption. During privatisation measures, former Communist party members and their families managed to hold onto power and economic influence and still dominate the city's government and trade.

Bulgaria, however, is beginning to attract an increasing number of tourists (who head mainly for the seaside resorts of the Black Sea and ski resorts such as Bansko), and it is hoped that this new influx of cash will help the country shape up. Bulgaria's accession to the EU in January 2007 has no doubt further boosted its appeal as a tourist destination, and will help its economic growth in years to come.

Today's visitors to Sofia will find little of the austere Eastern Bloc society of the past. More likely they will be pleasantly surprised by the lively streets, appearance of increasing affluence, new boutiques and clean, well-organised streets. With unemployment and inflation rates plummeting, the EU's newest member is gaining credibility and regaining economic stability, pleasing its educated population. The city's motto, ‘Ever growing, never old,' is as true today as it ever was.