Aid with Muscle: EU Commission Suspends Funds to Bulgaria

Today the European Commission issued an extremely critical report on Bulgaria’s fight against corruption and organized crime in the country.  So little progress has been made that the Commission decided to formally suspend aid to Bulgaria—the poorest member of the EU—and revoke the accreditation of the two government agencies that handle the funds received from the EU.

“The fight against high-level corruption and organised crime is not producing results . . . Corruption and fraud is affecting the delivery of EU financial assistance . . . A clear strategy to cleanse the system is needed,” a final draft of the report states, according to the Financial Times.

The financial sanctions come as a harsh blow to Bulgaria, which has relied heavily on pre-accession funding from the EU to develop infrastructure and spur economic growth.  The country could lose 600 million Euros, if not more, in pre-accession transfers.

Bulgaria’s entry into the EU in 2007 was conditional on progress in judicial reforms.  However, the country has yet to enter the Schengen area of passport-free travel and the eurozone.  Workers in Bulgaria are eager for the country to be admitted to the areas in order to free themselves from employment and travel restrictions.  But, public concern over the country’s future in the EU has grown, especially in the wake of a string of scandals earlier this year that led Bulgarian President Georgy Parvanov to call for “uncompromising, tough action” against organized crime and corruption.  Judging by the European Commission’s announcements today, it seems that the calls were not tough enough.