Bulgarian corruption draws sanctions from Brussels
Friday, 18 July 2008
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 total sums of money to be withheld from Bulgaria amount to more than €600 million, notably under the PHARE pre-accession programme, Bulgaria's National TV reported on Thursday morning (17 July).
The draft report notes that while Bulgaria has received "important financial and technical support from the European Union in the pre-accession period," it has not been able to manage it properly.
"Bulgaria is experiencing difficulties in many of these programmes and has to demonstrate that sound financial management structures are in place and operating effectively. Administrative capacity is weak," reads the nine-page document seen by EUobserver.
"Beyond that, there have been serious allegations of irregularities as well as suspicions of fraud and conflicts of interest in the award of contracts," it adds.
Before becoming an EU member, Sofia benefited from different European programmes – such as PHARE, SAPARD and ISPA – which were designed to prepare the country for the absorption of larger amounts of EU aid later on.
Agencies approved by Brussels supervised the management of these programmes.
But "monitoring and audits show serious weaknesses in the management and control systems and point to a number of irregularities, suspected fraud cases and conflicts of interest between the programme administration and contractors," the text says.
"As a result, payments to two implementing agencies … have been suspended."
A 'grave problem'
The commission underlines that "[EU funds] are aimed at helping less favoured regions in Bulgaria, catalysing needed investment in transport, telecommunications and energy infrastructure, promoting competitiveness, fostering social cohesion and enhancing Bulgaria's overall economic performance and stability."
But "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," it goes on.
The EU executive points to "turnover of staff, unattractive salaries that create opportunities for corruption, and outdated, centralised procedures" in the public administration, as well as "lack of accountability and transparency in public procurement when tendering EU funds" as among the main problems.
"High-level corruption and organised crime exacerbates these problems of general weakness in administrative and judicial capacity," it adds, noting that it all amounts to a "grave problem."
Brussels also warns that unless Sofia takes effective steps to remedy the shortcomings, it may lose the pre-accession funds for good.
OLAF concerns
"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 organised crime," the commission concludes.
The report is to be released next Wednesday (23 July), together with Brussels' annual reports on justice and home affairs problems in Bulgaria and Romania.
It will come a week after leaks in Bulgarian media of a document by the European Anti-Fraud Office (OLAF) showing that OLAF is concerned about links between high-level politicians and those involved in the mishandling of funds in the country.
In a letter to Meglena Plugchieva, Bulgaria's deputy prime minister and in charge of overseeing how EU funds are spent, OLAF director Franz-Hermann Bruner wrote: "The Bulgarian government and state services have powerful forces who do not have an interest" in punishing some of the individuals currently under investigation for the fraudulent use of EU funds, in particular those of the SAPARD agricultural aid programme.
Netherlands pushes for further EU sanctions against Bulgaria
Bulgaria could face further sanctions in the area of justice and home affairs, including having its membership of the EU's borderless Schengen area delayed, after recent reports from Brussels highlighted the country's problems with corruption.
A group of member states, including the UK, France and the Netherlands is pushing for tougher sanctions against Sofia, Dutch daily NRC Handelsblad reported on Thursday (17 July).
While none have called for the activation of a clause that would result in the refusal to recognise decisions by Bulgarian courts throughout the EU – something that could eventually become a bigger headache for the bloc than for Bulgaria itself - the Hague, in particular, is pushing for delaying Bulgaria's membership of Schengen.
Sofia is not planning to join the EU's borderless area before 2011, but had hoped to participate in the zone's joint database - the so-called Schengen Information System – as early as this year. The EU could now block this, the paper reports.
The Dutch push comes ahead of the publication of Brussels' annual reports on justice and home affairs problems in Bulgaria and Romania next Wednesday (23 July) as part of its ongoing monitoring process of the Union's two newest member states.
Meanwhile, two documents this week – one from the European Anti-Fraud Office (OLAF) and a draft from the European Commission – have highlighted Bulgaria's persistent corruption problems.
In addition to the two justice and home affairs reports, the commission is set next week to also publish another on the management of EU funds in Bulgaria, harshly criticising the country's mishandling of the bloc's money and threatening it with losing millions of pre-accession funds for good.
Brussels is to call on Sofia "to cleanse its administration" and make sure that EU money is not "siphoned off by corrupt officials, operating together with organised crime."
Both reports, leaked to the media, have provoked an outcry in Bulgaria and opposition parties have called for a non-confidence vote against the government next week, in addition to starting an impeachment procedure against the president.
For its part, Romania will also be criticised in the commission's justice progress report next Wednesday, notably over the parliament's delay of inquiries into corruption cases involving a former prime minister and other top officials.
However, the criticism is expected to be less harsh than for Bulgaria and no additional document on how Bucharest spends EU funds is expected.
Both Bulgaria and Romania joined the EU on 1 January 2007.