EU freezes hundreds of millions in assistance to Bulgaria, citing corruption, organized crime

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EU freezes hundreds of millions in assistance to Bulgaria, citing corruption, organized crime

Wednesday 23 July 2008
By: ROBERT WIELAARD, The Associated Press
BRUSSELS, Belgium

The European Commission froze almost euro500 million (US$800 million) in aid to Bulgaria on Wednesday, citing corruption, organized crime, severe spending irregularities and alleged vote-buying in a country that only joined the EU last year.

The move prompted Bulgaria's opposition party to call for a confidence vote against the Socialist-led government, the sixth such motion since the government took office in 2005. Since the Socialists control 150 seats in the 240-member parliament, the government is expected to survive the vote.

The European Commission indefinitely froze euro486 million (US$774 million) in aid for farmers, road-building and other infrastructure projects and blacklisted two Bulgarian government agencies handling EU funds.

The suspension remains in effect until "sound financial management structures are in place and operating effectively," the EU said in a statement.

In a separate report, the EU warned Romania it must speed up reforms and do more to fight corruption but announced no financial penalties.

Bulgarian President Georgi Parvanov conceded there were "serious problems" in the Bulgarian system that hampered efforts to tackle corruption and organized crime. But he said the country had already made some progress toward solving these issues.

"It is important that we do not miss the chances which EU membership gives us for overall modernization of the country," he said.

Romania vowed to crackdown on corruption.

"We are determined to continue zero tolerance to those who use public office to get rich," Romanian Prime Minister Calin Popescu Tariceanu said in Bucharest.

Bulgaria has seen some 150 mafia-style slayings since it emerged from communism in 1989, but there have been no convictions.

The European Commission said Bulgaria's legal reforms and fight against corruption and organized crime were not producing sufficient results. It cited a lack of progress in freezing criminals' assets and feeble control over political party financing.

The Bulgarian judiciary is rife with red tape and leaks confidential information that harms corruption and fraud prosecutions, the commission said. Bulgaria's penal code is outdated and the roles of police, investigators and prosecution in law enforcement are insufficiently defined, it added.

It also expressed concern allegations of corruption and vote-buying at the November 2007 local elections have not been properly investigated.

Transparency International, a non-governmental group that fights corruption worldwide, said the EU's findings echoed its own.

"Immediate steps need to be taken to stop the misuse of EU funds and to investigate corruption-related crimes," said Diana Kovatcheva, Executive Director of TI Bulgaria.

Despite the negative report cards, the EU executive asserted the decision to bring the two into the EU in 2007 was valid. They joined on condition they would undertake major reforms and curb corruption.

The 27-nation EU has taken in 12 newcomers since 2004, spending billions of euros (dollars) to improve infrastructure across poorer eastern Europe.