EU suspends some aid to Bulgaria, bars agencies

EU

The European Commission suspended aid to Bulgaria worth hundreds of millions of euros and barred two key payments agencies from receiving EU funds over corruption and mismanagement, a spokesman said.

A report on the management of European Union funds by the latest and poorest EU member said the fight against high-level corruption and organized crime was not producing results and the Commission had to act to protect taxpayers' money.

“Therefore, the Commission has taken the decision today to formalize this suspension (of pre-accession aid) and withdraw the accreditation for two government agencies in charge of managing these pre-accession funds,” spokesman Johannes Laitenberger said.

The two reports on Bulgaria - one on funds and the other on judicial reform and the fight against corruption and organized crime - were the most scathing criticism ever leveled by Brussels at a member state.

“Reform of the judiciary and law enforcement structures is necessary and long overdue,” the Commission said. “The fight against high-level corruption and organized crime is not producing results.”

Unlike fellow Black Sea newcomer Romania, which was criticized in a separate report on judicial reform, Bulgaria was subjected to financial sanctions.

But the EU executive softened the blow at the last minute by toning down the harshest wording of earlier drafts and omitting a threat to delay Bulgaria's entry into the euro single currency zone and the Schengen area of passport-free travel.

And the reports were presented to the media by low-profile spokesmen rather than by Commission President Jose Manuel Barroso or any political-level representative.

Laitenberger gave no overall figure for the suspended funds, but Commission officials said the amount frozen was more than €500 million ($786.7 million).

The funds concerned are mainly in the PHARE technical assistance program for acceding countries, and in the ISPA road-building program. In the case of the PHARE funds, unless the payments agencies are reformed sufficiently to recover their accreditation by the end of this year, the money will be lost. (Reuters)

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