Bulgaria risks losing EU funds

[Tsontos]

Bulgaria risks losing EU funds


By Stephen Castle

BRUSSELS: The European Union could freeze about €1 billion in aid to Bulgaria, according to a leaked document that accuses Sofia of losing money through high-level corruption, organized crime and incompetence.

In one of the most scathing documents of its type ever drawn up by the European Commission, the EU executive arm lists a litany of administrative and judicial failings at the local, regional and national levels in Bulgaria, which joined the EU last year.

"Bulgaria itself has to make the commitment to cleanse its administration and ensure that the generous support it receives from the EU actually reaches its citizens and is not siphoned off by corrupt officials, operating together with organized crime," the commission said in a draft of an official report.

Since the admission of Bulgaria and Romania into the EU in 2007, some politicians have argued that the bloc made an error in extending membership to two nations that had failed to make sufficient reforms to meet the requirements of the bloc.

Widespread reports of crime, corruption and bad administration, particularly in Bulgaria, have dimmed enthusiasm in the 27-nation EU for further expansion.
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The conclusions of the draft report, seen by the International Herald Tribune, may change before they are formally endorsed by the European Commission next Wednesday. But the leaked document paints a damning picture of lax controls.

Jana Mittermaier, head of the Brussels office of Transparency International, an anti-corruption group, said that while she could not comment on a draft report, independent assessments showed "stagnation" of reforms over the past five years.

"What especially concerns us is lack of enforcement of new anti-corruption laws," she said. "Since Bulgaria joined the EU there was no significant change. We believe that the persistent problems are high-level political corruption, maladministration, weak judiciary and the misuse of EU funds, which takes place because the authorities don't have the capacity to control the funds and investigate the crimes. Many politicians are in a conflict of interest situation and until recently there was insufficient political will to fight corruption."

Bulgarian officials in Brussels were not immediately available for comment. But Bulgarian leaders have asked for leniency, arguing that the burden of any cuts would fall on innocent citizens.

The commission's draft assessment says it views the situation as "serious," though it does acknowledge that the Bulgarians had taken some steps to improve the situation including the appointment of a deputy prime minister responsible for the coordination of EU funds who also head the Bulgarian Anti-Fraud Service.

Within programs worth €780 million, or $1.2 billion, that were designed to help Bulgaria make internal reforms, the commission found "a number of irregularities, suspected fraud cases and conflicts of interest between the program administration and contractors." About €610 million of this money should be suspended, it said.

In addition, two government agencies could be affected: one dealing with agricultural marketing, with €210 million yet to be paid; and the National Road Infrastructure Fund, or NRIF, for which funding for road building worth €144 million should be frozen, the draft said.

The report also noted allegations against the executive director of the NRIF, who is accused of signing contracts with a construction company controlled by a relative. "In addition, two NRIF officials responsible for the implementation of EU funds were arrested and charged with taking bribes," the report said.

The EU internal anti-fraud agency, OLAF, has been mounting its own investigations into various cases, only to discover its efforts being hampered by the Bulgarian authorities, the report said.

"There is a lack of commitment to act decisively, swiftly and in cooperation with other public authorities when fraud is identified" the report said. It added: "OLAF has been faced with instances of breaches of confidentiality, improper transmission and leaks of confidential information. There is a strong suspicion of the involvement of organized crime."

Part of the problem, the report added, lies with weaknesses in the civil service and the judicial system where staff turnover is high and salaries low, creating the temptation for staff to take bribes. Though most of the EU money concerned is likely to be frozen, not taken permanently, the Bulgarian government will find itself losing out financially unless it makes reforms quickly, the document warned. "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. Because the document is not the final version, the commission had little to say about its contents Friday. "I am not going to deny the existence of this report," said Mark Gray, a commission spokesman. "The commission is working on a number of reports for next week looking at both EU funding and judicial reform and corruption in Bulgaria and Romania. The document that I have seen circulated is not the latest draft. The report that matters is the one adopted on July 23."

http://www.iht.com/articles/2008/07/18/europe/union.php