Fri, 08/01/2008 - 15:26

Bulgaria has lost almost a billion euros in EU aid. And this is only the beginning

Groucho Marx famously said he'd never become a member of a club that would accept him as a member. In the wake of the damning EU report that suspended hundreds of million euros of aid to Bulgaria the Bulgarian political establishment should perhaps be watching Marx brothers' films rather than be ruling the country.

The patience of the EU has expired, just like the patience of the New York clubs' bouncers when they saw Mr Marx. Corruption, mismanagement and stupidity has lost the country European funding of at least 486 million euros. Over time, these losses may total 1 billion euros. Unprecedentedly, the European Commission has frozen funds for an EU member state by withdrawing the credentials of two Bulgarian agencies in charge of about 90 percent of European money, including the PHARE and ISPA programmes. The reason? These agencies are thought to be funnelling the money into the pockets of shady groupings linked to senior members of the establishment. According to OLAF, the European anti-fraud office, President Parvanov might be amongst them.

To put it simply, Bulgaria is thought to have defrauded the EU. It has jeopardised the enormous gains of EU membership only to enable a corrupt elite get richer.

Bulgaria acceded to the EU in 2007 with a risky compromise - it did not cover a number of accession criteria. In order to compensate for the shortcomings, the commission decided to monitor closely the country's progress. It has published semi-annual reports about Bulgaria, indicating there has been a political will to fight corruption.

Indeed, the Bulgarian parliament has been passing new legislation speedily and in line with EU standards. However, the conclusion now is different: "Bulgaria presents a mixed picture. Considerable efforts have gone into setting up institutions and processes. However, this reform has not yet produced sufficient results. So far, Bulgaria has not been able to demonstrate that its judicial system is working effectively. Institutions and procedures look good on paper but do not produce results in practice."

There is also corruption in the Bulgarian health care and education systems, according to Brussels. The commission has now made an about-face. In effect it acknowledges that its previous reports have been, well, wrong: the truth is that in Bulgaria there isn't any political will to apply the laws. The sad conclusion is that the Bulgarian state has in actual fact been supporting organised crime. The EU seems to be realising that the problem is not in a single institution or person but in the whole state machine which appears to be linked to organised crime.

It seems unlikely that this situation will change in the near future.

The suspended EU funding may have very grave consequences, especially on small and medium-sized businesses. Road and motorway projects will suffer most. The EU sanction may lead to decreased foreign investment as well. For the time being the EU isn't suspending Bulgaria's membership. It argues that "Bulgarian citizens deserve access to the full benefits of EU membership which should contribute to strengthening the rule of law and eliminating corruption." It also says that if there are assurances for proper management of the European money and the rule of law the funds will be released again.

Unless this happens, however, Bulgaria runs the danger of being kicked out of the club that accepted it as a member. Significantly, it is the one club that could help it change its antiquated ways. Groucho Marx had a saying for this as well: "A child of five would understand this. Send someone to fetch a child of five."

Issue 23

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