Bulgaria to lose EU money over persistent corruption problems

BRUSSELS - Bulgaria is next week set to lose pre-accession funds following concerns over possible fraud cases, according to a report from the Reuters news agency.

The European Commission will next Wednesday (23 July) publish its annual reports on justice and home affairs problems in Bulgaria and Romania as part of its ongoing monitoring process for the two member states.

Additionally, Brussels will publish a third document on the handling of EU funds in the two states.

Both Sofia and Bucharest - EU members since 1 January 2007 - are expected to be criticised for their levels of corruption, but only Bulgaria is to be punished by losing funds, according to the press agency.

The funds are worth some €500 million and have already been frozen due to investigations by the European Anti-Fraud Office (OLAF).

But on Wednesday (16 July), Bulgarian media published leaks from the OLAF report, which alleges the existence of high-level political protection of those involved in the mishandling of funds in the country - a "political umbrella", say local reports, offering cover in particular to those connected to the SAPARD agricultural aid programme.

"In Bulgaria, there are serious, systemic problems. We will be confirming that certain money will be forfeited," Reuters quotes an EU source as saying.

Additionally, the commission could call for the accreditation of the payments agencies in Bulgaria to be withdrawn, according to a report by Bulgarian National Television (BNT). Payments agencies are charged with such handling of EU projects.

Speculation?

Contacted for a comment on the press reports, European Commission spokesperson Mark Gray said that they were "the latest in a very long line of speculations. Reuters do not have the [Bulgarian and Romanian] reports," he said.

"I am not going to confirm or deny anything," he added.

His statements were echoed by Betina Joteva, the spokesperson of Bulgaria's permanent representation to the EU.

"For us, this is yet another piece of news preceding the publication of the [progress] reports," she told the EUobserver. "We do not have them [the reports], so I cannot confirm or deny these claims."

Commenting on the OLAF report, Bulgarian Prime Minister Sergei Stanishev said: "Yes, the problem is substantial."

"Bulgaria is in the process of learning how to work transparently and efficiently [with EU funds], and therefore the difficulties are not a surprise, the question is how to eradicate them quickly," he was quoted as saying by Bulgarian media.

"Problems with EU funds exist in every EU country [and this was the case even] before Bulgaria became an EU member," he added.

However, he denied any "political umbrella" existing in the country, "neither before, nor now."