When the US imposed sanctions last week on two Bulgarian businessmen, an intelligence official and more than 60 companies, Hristo Ivanov, who leads an opposition party and is an anti-corruption campaigner, welcomed it as a “friendly gesture” by Washington.

By that he meant the US enforcement action — the most extensive yet undertaken using so-called Magnitsky act powers — landed just six weeks before Bulgaria holds parliamentary elections in which the country’s veteran centre-right leader Boyko Borisov is fighting for his political life amid a public backlash over corruption.

Opposition politicians and analysts said the US move would also be seen by Bulgarians as a rebuke to the EU over its inaction on corruption in its own backyard.

“The contrast is really dramatic,” said Ivanov, leader of Yes, Bulgaria, a reformist party.

Borisov, a stalwart ally of Germany chancellor Angela Merkel, served as Bulgaria’s prime minister for 12 years with a few brief interruptions. Critics say he has overseen a decade of graft, cronyism and economic underperformance.

Last year photographs appeared showing a pistol on top of Borisov’s nightstand and wads of €500 notes. Borisov has admitted owning a gun but said the photographs were doctored.

Public anger over corruption, which triggered five months of demonstrations last year, has recently eroded support for Borisov’s GERB party. It was unable to form a government after elections in April although it still topped the poll. Hence the fresh elections, which take place on July 11.

For a long time Borisov appeared like an unmovable “geological structure” in Bulgarian politics, said Ivanov, “using pressure and fear to let everyone know who is the strongman”. But US sanctions have “added to the change of perception, of [Borisov] now losing his grip on power”.

According to the US treasury’s Office of Foreign Assets Control (Ofac), the three Bulgarians were sanctioned for “corruption including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources or bribery”.

“The biggest question now is who did they corrupt in government?” said Elena Yoncheva, a Bulgarian socialist member of the European Parliament.

The US treasury sanctioned three people: Vassil Bozhkov, an exiled gambling tycoon who enjoyed official favour in the form of easy licensing and tax breaks before falling out with the government and coming under investigation for bribery; Delyan Peevski, a former MP, businessman and one-time media mogul; and Ilko Zhelyazkov, an intelligence official in charge of electronic surveillance. Their assets have been frozen and cut off from the US financial system or institutions with connections to it.

Bozhkov used bribery to “create a channel for Russian political leaders to influence Bulgarian government officials”, Ofac said. But Bulgarian analysts say Washington’s main target appeared to be Peevski, seen as the linchpin of state capture under Borisov’s rule.

Separately, the US State Department said last week that Peevski used Zhelyazkov as an “intermediary and accomplice to peddle influence and pay bribes to protect himself from public scrutiny and to exert influence over key institutions and sectors in Bulgarian society”.

Before he sold much of it earlier this year, Peevski built up a media empire that controlled 80 per cent of national newspapers and a private TV channel, giving him vast power to make or break reputations.

Peevski could not be reached for comment, but following the US sanctions he issued a statement saying he had “not participated in corrupt acts, and the listed reasons for the imposed sanctions do not state a single true fact”.

After the US sanctions move, Borisov distanced himself from Peevski, saying he had only dealt with him as an MP. But, with scrutiny intensifying, he may struggle to convince many Bulgarians.

At a press conference last week, Borisov said: “I clarified my relations with Peevski a long time ago and they are only political. We have neither companies nor a common business. We have not received a penny from Bozhkov.”

Bulgaria’s interim government is already investigating allegations that at least 32 politicians from parties opposed to Borisov, including the current caretaker prime minister, were wiretapped in the run-up to the April elections by the spy agency headed by Zhelyazkov, the intelligence official Ofac described as Peevski’s “frontman”.

Boriana Dimitrova, managing director of Alpha Research, a consultancy in Sofia, said it was too early to tell how the US sanctions would affect next month’s election. There was a battle of interpretations because Bozhkov, the sanctioned gambling tycoon, also faced prosecution under Borisov’s government and had connections to parties opposed to Borisov. But, she added, the “sanctions will encourage and motivate” the reformist forces, with Borisov “already receding into the background”.

Dimitar Bechev, a fellow at the Institute for Human Sciences in Vienna, said Borisov had avoided deeper EU scrutiny over graft because his strategy was to keep his head down in Brussels and “never work with the other eastern governments to raise hell”.

Bulgaria is supposedly subject to special EU monitoring over corruption. In 2014, Brussels became so concerned about graft it temporarily suspended EU aid. But the monitoring mechanism is now “completely defunct”, said Bechev.

Vessela Techernova of the European Council on Foreign Relations in Sofia said it was now incumbent on the EU to send a clear message that it would no longer turn a blind eye to graft in Bulgaria.

“It is harmful for Bulgarian society. Frankly, it is not good for European cohesion. It has put Bulgaria’s [economic] catching up on a much slower pace. We have missed thousands of opportunities over the past 10 years.”