LM Legal Services Blog

Bulgaria lost 220 million Euros with the decision of the European commission not to resume the accreditation of the two PHARE agencies in the country which has been taken in July of this year. The two agencies, one at the finance ministry, the other at the regional development ministry, have been administration 560 million Euros coming from the EU, of which 340 million Euros have already been allocated. The rest – 220 million Euros – had to be contracted in November 2008 but have been frozen and can not be used now.

The reason for this is that according to the European Commission, the measure which Bulgaria introduced in the last six months have been only promises and there have not been any concrete results. The problems linked to corruption, the application of law, the conflict of interest, the qualification and the number of the employees in administration and the management of the funds. This decision of the European Commission aims to protected the interests of all European citizens, including the Bulgarians, said Kristina Nagy, the speakeswoman of the European Commission. This action against an EU member state is without precedent in EU history. The aid that has been canceled or frozen is for farmers, road-building and other infrastructure projects.

According to the draft of the monitoring report of the European Commission on Bulgaria (the official report will be published on 23 July 2008) the country’s progress is slow and more limited than expected. The fight against corruption is unsuccessful and Bulgaria does not demonstrate capacity for governing the European funds. The Penal Code is outdated and it is the reason for the overload of the judicial system, there are no results from the ongoing investigations, the administrative capacity of the judicial system is unsatisfactory and there are proofs of endemic corruption in the health and the education systems. Despite these, it is expected that the European Commission will not impose a safety clause on Bulgaria. However, it is expected that the commission will stop financing exceeding 1 billion Euros from the SAPARD and PHARE programs because of abuse of funds and corruption