EC Terminates SAPARD Program Payments for Bulgaria

Politics | Author: Ivan Dikov |March 7, 2008, Friday // 00:00
Bulgaria: EC Terminates SAPARD Program Payments for Bulgaria Bulgarian Finance Minister Plamen Oresharski confirmed Friday afternoon about a EC letter to the cabinet announcing the termination of SAPARD Program payments for Bulgaria, after the letter had leaked to the public. Photo by Sofia Photo Agency

The Bulgarian Minister of Finance Plamen Oresharski confirmed that the European Commission had terminated the payments for Bulgaria under the SAPARD Program, Measure 2 - improving the processing and marketing of agricultural and fish products.

This became clear earlier on Friday from the letter of Jean-Luc Demarty, Director of the EC Agriculture and Rural Development Directorate, to the Bulgarian Government.

The letter was provided to the media and the public by MP Yane Yanev from the opposition United Democratic Forces coalition.

Minister Oresharski said the EC terminated payments for over EUR 100 M. He explained that the measure was motivated by a case from 2006, which was being investigated by the European Anti-Fraud Unit (OLAF).

The case included the import of second-hand agricultural machinery, which was then declared as new before the EU funding institutions. According to Oresharski, the Agricultural and Rural Development Directorate had terminated the SAPARD payments until the case was duly investigated.

The Bulgarian Finance Minister declined to make a prognosis as to when the payments under the EU pre-accession agricultural program would be resumed. He stated, however, that the payment of the frozen PHARE Program funds could start again as early as April.

"We are taking measures to rectify the flaws and we will do this much earlier than the EC deadline of March 31", the Minister said.

Apart from the investigation of alleged frauds with funds under Measure 2 of the SAPARD Program, the termination of the payments also has to do with Bulgaria's serious problems with the absorption of the funds in 2007, and the considerable amounts of money that need to be absorbed in 2008 before the end of the SAPARD program for the country.

According to MP Yane Yanev, who leaked the EC letter to the media, Bulgaria is going to lose not less than EUR 100-150 M as a result of the current EC measure. He added that the Commission started the procedure of requiring back the funds that had already been absorbed by the beneficiaries.

Yanev said this resulted from the fact that the European Anti-Fraud Unit (OLAF) and other EU institutions found that a number of firms such as the meat processing factories Rodopa Veliko Tarnovo and Chubra, which got EU money for new equipment but bought old and cheaper technologies instead.

Yanev added that if the beneficiaries did not return the SAPARD funds, the money would have to be paid by the national budget.

"We believe this is a huge scandal which will delay the absorption of funds for the rural areas. This means that there is an enormous amount of corruption in the mechanisms for absorbing EU money", the opposition MP said.

The Sofia Mayor was the first to break the news about EC letter and the termination of SAPARD early on Friday morning before the Bulgarian National Television. However, he did not provide any details.

So far the EC has frozen the Bulgaria's funding under the two other pre-accession programs PHARE and ISPA, and over EUR 217 M under the Regional Development Program.

These measures have been taken by Brussels in the wake of the corruption scandal in Bulgaria's Road Infrastructure Agency, in which high-ranking officials were caught with bribes, but the EC has allegedly noticed other irregularities in the EU funds management procedures as well.

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