Bulgarian Prime Minister Sergei Stanishev said that Bulgaria deserved the criticism in European Commission's (EC) reports on Bulgaria's progress in the fight against organised crime and corruption, adopted on July 23 2008.

"There are grounds for criticism, to be honest," Stanishev told a news conference in the Black Sea city of Varna. "The truth is Bulgaria is learning how to work with the European money," he said.

It was a hard task, but the country would pull through in the end, Stanishev said.

As far as the Government was concerned, the report was a challenge to work harder and achieve better results. "I will fight with all means against the arising of euroscepticism among the Bulgarian people, because this would be wrong," Stanishev said.

"Bulgaria has a lot of problems, the heritage of the transition, which in a number of aspects was not the cleanest one," he added.

The EC reports said that the fight in Bulgaria against high-level corruption and organised crime was failing to produce results and that the EC had to act to protect European taxpayers' money. Therefore, it had decided to suspend hundreds of millions of euro in aid to Bulgaria and was withdrawing the accreditation of two Government agencies to manage pre-accession funds. The decision had been made because of serious irregularities and because the measures taken to improve problems in dealing with the funds were inadequate.

Stanishev stressing the efforts made by the Bulgaria in the past several months, which clearly showed that Bulgaria had the political will to go ahead with reforms. A result of these efforts was the creation of the State Agency for National Security, he said.

Stanishev focused on the positive points in the reports, highligting the positive assessment of the structural and personnel changes at the Interior Ministry, of the appointment of a deputy prime minister in charge of the European funds management, of the closing down of duty-free shops and petrol stations at Bulgaria's borders with Serbia, Macedonia and Turkey.

"I want to express my regret, though, that some of our efforts and their results were not reflected in the report, but I am sure this will happen in the future," Stanishev said, referring in specific to the amendments passed to the laws on public procurement and roads, as well as the future Conflict of Interest Act.

Still, the final version of the report was milder than earlier drafts, Stanishev said. "The Bulgarian society should judge on its merits the effective co-operation we had with the EC regarding the final version of the report because you know there were a lot more critical drafts," he said.

Stanishev said he regretted the withdrawal of the accreditations of the Central Finance and Contracts Unit at the Finance Ministry, and the Ministry of Regional Development and Public Works's Phare funds agency, which would hinder the absorption of 250 million euro by Bulgaria. The funds have been allocated under the EU's Phare programme but were yet to be contracted.

Asked whether he would sack the two ministers to which the agencies were subordinated, he said: "My approach will not be to throw victims to the wolves just to create relief." Other member states had experienced similar problems in the past, so it was not uncommon for payments to be halted, but the Government should strive to achieve better communication with European agencies and improving financial control.

"I expect all institutions, linked to the Cabinet, to really muster their strength," he said. The process was already underway, since the first drafts of the report had surfaced a week before the report was published, he said, adding that he had ordered that the specific recommendations be analysed.

"As far as the judicial system is concerned, in a lot of respects the Bulgarian society shares the EC's criticism [...] We need to introduce mechanisms to make court proceedings quicker," Stanishev said, admitting that too often judiciary procedures in Bulgaria were unjustifiably slow.

Asked to comment on the no-confidence motion filed by Bulgaria's opposition parties on the grounds of Cabinet mishandling of European funds that, the opposition parties said, had caused enormous financial and moral losses to Bulgaria, Stanishev said that it was a natural move for the attention-seeking opposition. "I don't trust the sincere concern of the opposition," he said.