Bulgaria suspends EU-funded projects amid graft suspicion

BULGARIA:BULGARIA HAS suspended €88 million of EU-funded roadbuilding projects amid suspicions of graft and mismanagement, as the Balkan state tries to convince Brussels that it is winning its battle with organised crime and corruption.

The government now includes a deputy prime minister, Meglena Plugchieva, who is in charge of monitoring the spending of EU aid, but a damning progress report from Brussels next month could see Bulgaria denied hundreds of millions of euro in aid, which is vital to its plans to modernise crumbling infrastructure.

Ms Plugchieva said international accounting firm KPMG had delivered a highly-critical analysis of the roadbuilding fund, which would now be disbanded and replaced by a new agency under her direct supervision.

"Unfortunately it shows serious problems," she said. "We will send a report to prosecutors."

The KPMG report found "potential conflicts of interest" inside the roadbuilding agency, and Bulgaria's own audit office has accused it of failing to meet many requirements when awarding public tenders.

Earlier this year, the roads agency chief Vesselin Georgiev resigned amid allegations that he awarded lucrative contracts to his brother's company, and he is now being investigated for alleged abuse of power and misuse of EU funds. Two former senior colleagues have also been accused of taking bribes.

Sofia delivered a report to Brussels this week on its campaign against crime and corruption, and will await the EU's response on July 23rd with trepidation.

Frustrated by Bulgaria's failure to root out corruption, convict senior officials of financial crimes, or solve the scores of contract killings that have blighted the country in recent years, the EU has already frozen some €450 million in funding.

In a recent interview with a Bulgarian newspaper, Danuta Hübner, the EU's commissioner for regional policy, said Sofia's handling of the road agency issue would be "a test for Bulgaria to prove that it can abide by the rules when dealing with EU money".

While government officials claim Bulgaria is finally getting its house in order, critics say officials will do nothing to stop corruption - and break up powerful networks linking political, business, security and criminal figures - without EU pressure.

"All steps this government takes are just a response to Brussels's demands. There is no initiative, everything is done under duress," said analyst Rumiana Bachvarova.

Alleged murky dealings have even surrounded Bulgaria's top football club, CSKA Sofia, which has been barred from next season's Uefa Champions League because of unpaid taxes and is about €1 million in debt.

Prosecutors are investigating the club's former president and former finance chief over the disappearance of almost €5 million. They deny any wrongdoing.

Neighbouring Romania is also struggling to convince the EU that it is getting on top of a major corruption problem.

Two former farm ministers were charged with abuse of office this month, but a parliamentary commission has recommended the termination of a bribery investigation against former prime minister Adrian Nastase.