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1st Jul 2022

Bulgaria loses €220 million in EU money

Bulgaria has irreversibly lost €220 million of pre-accession EU funding over its persistent failure to tackle corruption, the European Commission announced on Tuesday (25 November).

Brussels in July suspended close to €800 million in aid to Bulgaria over corruption and fraud concerns, out of which €560 million under the PHARE pre-accession programme aimed at improving the country's infrastructure and institutions.

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  • Sofia has not done enough to fight corruption and fraud, Brussels says. (Photo: EUobserver)

It also withdrew the accreditation of two government agencies charged with handling EU money under PHARE.

On Tuesday, the commission said it had decided to maintain the measures and not to continue the agencies' accreditation at this stage.

"After careful analysis done by the European Commission, we regret that we have to maintain the suspension of payments and we are also for the moment not in a position to restore the accreditation for the two implementing agencies," commission spokesperson Krisztina Nagy told reporters in Brussels.

This effectively means €220 million are irreversibly lost for Bulgaria, as they have not been contracted yet and the deadline for this is 30 November.

"We hope that Bulgaria will now urgently take the necessary steps to improve the management of the funds. In the case of PHARE, these measures would unfortunately come too late and thus considerable amounts of PHARE funds can no longer be used by the Bulgarian authorities," Ms Nagy said.

The European Commission in July issued its regular report on the justice and home affairs situation in Bulgaria, urging the country to boost its fight against corruption and organised crime, which it then judged as "not producing enough results."

It also issued a separate report on Bulgaria's handling of EU funds, harshly criticising it.

The commission today recognised that "steps have been taken regarding the management and control systems," but it also insists "most of the measures are only a promise for future action and have not yet delivered concrete results."

'We have to play by the book'

Speaking to a group of journalists later on Tuesday, EU enlargement commissioner Olli Rehn said it was not "the most pleasant day" of his life, but that rules had to be respected.

"Bulgaria is an economic success story and a very committed and constructive member of the EU, and I welcomed it on political issues. But there is another dimension which is the protection of EU taxpayers and sound and proper management of EU funds," Mr Rehn said.

"We have to play by the book and we have to respect the rules of financial management and therefore there is for the moment no other option," he added.

According to the commissioner, three types of shortages in particular are still to be addressed by the Bulgarian authorities.

The scale of the irregularities remains "too high;" the government has not "fully acknowledged" the risk of political interference – although this would be "the first step to correct the problem," and there is still a large number of ongoing investigations by OLAF, the EU's anti-fraud agency.

Bulgaria ‘very disappointed'

Bulgaria voiced its disappointment over the commission's "very tough" assessment, saying it had done its utmost to address the problems in the months following the July report.

"We are very disappointed ... after all the hard work and the many measures we have taken," Betina Joteva, spokesperson for Bulgaria's permanent representation to the EU, told EUobserver.

In the last months, Bulgaria had intensified its efforts to follow the commission requirements, but they had not had enough time, she added.

Gergana Grancharova, the country's EU affairs minister, told Focus, a Bulgarian news agency: "I cannot hide my disappointment with the negative decision of the European Commission regarding the two agencies' accreditations. I expect to see the concrete arguments behind it."

The commission's next assessment of Bulgaria's, as well as Romania's, performance in the field of justice and home affairs, will be made in two interim reports in February next year.

The EU's two newest members have been subjected to the closest-ever monitoring imposed on a country joining the bloc.

Bulgaria bitter over Brussels decision on graft

Caught by surprise by the European Commission's decision on Tuesday to strip Bulgaria of €220 million in EU money over persistent corruption concerns, the country's politicians voiced their frustration and disappointment.

Bulgaria under fire for corruption levels

The European Commission is next week to release a report harshly criticising Bulgaria for the way it has been handling EU funds, and suspend payments to two of the country's agencies charged with managing EU projects. The draft talks of organised crime, corrupt officials and an outdated administration.

Commission softens tone on Bulgaria, Romania corruption

The European Commission on Wednesday released its annual reports on the justice and home affairs situation in Bulgaria and Romania, criticising the two countries for their persistent corruption problems. But the tone of the criticism, notably towards Bulgaria, was considerably softer than in a previously circulated draft version of the documents.

Barroso wants 'concrete results' from Bulgaria

While there is political will in Bulgaria to fight corruption and organised crime, the country has still not achieved the progress Brussels would like to see or delivered "concrete results," European Commission President Jose Manuel Barroso said in Brussels on Thursday.

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