EU to slam Bulgaria over graft, freeze funds

Saturday, July 19, 2008
BRUSSELS: The European Commission will issue a withering indictment next week of high-level corruption, maladministration and failures in the handling of European Union funds in new member state Bulgaria, according to a draft.

The report on the management of EU funds in the most recent and poorest newcomer, seen by Reuters on Friday, said: High level corruption and organised crime exacerbates these problems of general weakness in administrative and judicial capacity.

As a result, it said, Brussels has barred four Bulgarian agencies from handling EU funds because of corruption, freezing nearly 1 billion euros ($1.6 billion) in pre-accession aid and threatening future payments, the document showed. The report, described by EU officials as the most scathing ever written about a member state, is due to be adopted by the EU executive next Wednesday, and changes are still possible.

EU officials said the final figure for frozen funds may be smaller because some of the money has already been spent, but Sofia stands to lose nearly half a billion euros by the end of the year unless it can remedy flaws in its payments agencies.

Bulgaria is not able to reap the full benefits of this assistance because of critical weaknesses in administrative and judicial capacity, be it at local, regional or central level, said the report.

Urgent action is needed because deadlines for contracting some of the funds are approaching after which the funds will be lost to Bulgaria, it said.

Bulgarian Deputy Prime Minister Meglena Plugchieva, who was appointed this year to clean up the handling of EU funds, was in Brussels to meet the EU anti-fraud agency on Friday.