The decision to suspend roughly 500 million euros of EU funding was adopted by the Commission when it released its latest monitoring report on Bulgaria on 23 July, under the Cooperation and Verification Mechanism put in place with the country's EU accession (EurActiv 24/07/08).
Yesterday's decision confirmed that part of the frozen funding is in fact lost for Bulgaria. A further 340 million euro of contracted but unpaid aid will be shelved after the Commission revokes the accreditation of the Central Finance and Contracts Unit of Bulgaria's Finance Ministry and the Executive Agency of the Ministry of Regional Development and Public Works, Dnevnik writes.
EU Enlargement Commissioner Olli Rehn, presenting the EU executive's justification of the decision, said Sofia had only pledged future action without achieving specific results.
"This is not the happiest day of my life," Rehn said, adding that Commission experts and EU anti-fraud office OLAF had found not only persistent weaknesses but also fresh trouble.
Owning up to political meddling would be the first step towards resolving the difficulties, according to Rehn.
The governors again were taken by surprise and dubbed the decision "disappointing" and "unfair".
Finance Minister Plamen Oresharski did not answer his phone, while Regional Development Minister Asen Gagauzov declined to comment until he had heard the news from Deputy Prime Minister Meglena Plugchieva.
Meanwhile, MPs from the Socialist party, the major player in the ruling coalition, called for the establishment of a new EU aid handling structure and organisation, saying setbacks in the decentralised model could be removed by 1 January 2009.
Sofia may get back the frozen aid, provided it tidies up the two agencies by the end of 2009. If the Commission's audit and expert missions approve the measures planned by Bulgaria to tackle its problems, Brussels may unblock the funding with no new accreditation application required, an expert at the Commission told Dnevnik.
At Tuesday's briefing in Brussels, a British journalist asked when Bulgaria would be prevented from receiving structural funding as well.
Dennis Abbott, the EU's regional policy spokesman, said the Commission's audit team would arrive in Bulgaria in January to evaluate the measures taken towards the ISPA programme.
