Bulgaria likely to lose EU money

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Reported by

Beth
July 19, 2008

Bulgaria stands to lose almost $1 billion in European Union (EU) money because of the country’s failure to deal with organized crime and corruption, reported agencies July 18.

In a report leaked to Reuters, the BBC and others several days before the 27-country bloc was to report on Bulgaria’s progress in these areas, the EU’s finance arm noted that “Bulgaria…has to 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.”

Bulgaria joined the EU in January 2007, on the condition that it would reform its creaky, Communist-era judiciary, as well as get rid of organized crime and corruption.

Bulgaria has come under fire for its lack of initiative in stamping out either evil in recent months, most notably when the country’s interior minister had to resign in April because of his alleged links to mob groups. Bulgaria has also been the scene of 150 mafia murders since emerging from Communism in 1989, and not a single conviction. Bulgarian officials had also been suspected of fishy accounting of subsidy money from the European Union.

Last month, an investigation by the EU’s anti-fraud office, OLAF, prompted the European Commission to freeze around €120 million in agricultural aid to Bulgaria because of spending irregularities. The Commission has already frozen in total some $1.6 billion in aid.

But the EC’s new report, due out Wednesday, may freeze around the same amount in one fell swoop, and at the same time suspend the work of four agencies that disburse such EU funds. At least one EU member country – the Netherlands – is also pushing to keep Bulgaria out of the Schengen zone, which it is due to join in 2011.

Meanwhile, the Bulgarian government was shown to have hired US and Austrian public relations companies to buff its tarnished image. Sofia spent about $1.53 million in taxpayer money last December, for example, to hire Austrian Hochegger Kommunikationsberatung for a campaign to improve Bulgaria’s image in the EU.

The PR deluge may not help. The EU is also due to come out with a report on Bulgaria’s judiciary soon that promises to be highly critical of unsolved gangland murders and the lack of prosecutions of senior officials.