The public outcry at the contents of a report sent by the European Anti-Fraud Office (Olaf), leaked on July 16, and the expectations of a backlash from the European Commission report on July 23 have served to divert attention from other issues. While President Georgi Purvanov was defending the donation his campaign received from a businessman singled out in the Olaf report as one of the masterminds of a criminal group of companies that allegedly defrauded tens of millions of euro in European Union funds, and the opposition was calling for the heads of Purvanov and Prime Minister Sergei Stanishev, the Cabinet quietly approved on July 16 two draft decisions for the allocation of funds to infrastructure projects.
The first one was to provide 120 million leva to help cover the ongoing construction on the Maritsa, Trakiya and Hemus highways and the southern arc of the Sofia ring road. The second one was to allocate 47 million leva to continue work on 10 projects that have had their funding under the EU’s Phare programme frozen because of delays and after a KPMG report raised suspicions of malfeasances.
As the Cabinet explained in its media statement, the goal was to speed up (in the first case) and prevent the suspension (in the second) of construction on roads of “national priority”.
Now, as anyone who has ever driven on Bulgarian roads can tell, the amount allocated by the Government is much lower than what is needed to make any real impact towards improving the quality of infrastructure. But while the goal of having better roads in itself is commendable, what is strange is how additional funding has been allocated exactly at the time when the EC has frozen funding to a number of infrastructure projects, including the 10 that will receive a total of 47 million leva to be completed.
The problem, of course, is that the authorities in Brussels are not convinced that the money of European taxpayers is spent in the best way possible, nor that all the funds are reaching their intended targets.
Bulgaria’s Cabinet, however, does not seem to have the same qualms about spending the money of Bulgarian taxpayers. Far from it.
Assen Gagaouzov, the Regional Development and Public Works minister, has justified the decision by saying that the suspension of Phare funding should not result in work being stopped.
“Life is stronger that some Phare or some Ispa,” he was quoted as saying.
What is not clear is how the Cabinet plans to ascertain whether there were any malfeasances and how it would recover the funds should it emerge that such malfeasances did occur. But then again, judging by Gagaouzov’s media statements, that is not much of a concern, since the fault lay not with the companies that are carrying out the work or the state administration for slowing them down, but with KPMG for not doing its job “right” and writing its report, which led to the payments being halted, using media reports rather than facts, the minister appears to believe.
European funding, which meant to improve the standard of living in Bulgaria, lest one forget, at least had European control on how it was spent. That is not quite the case when it comes to the money of Bulgarian taxpayers.
The Cabinet of Prime Minister Sergei Stanishev, after all, has enough experience in spending budgetary surplus. In 2007, 1.4 billion leva were distributed to projects of “national priority”, including some that were more than a year overdue, like the introduction of the Europe-wide emergency number.
But then, as now, the question of control over how the money would be spent was barely raised. Stanishev proudly proclaimed, after the EC report was published on July 23, that Bulgaria had a big enough budget surplus to cover the additional expenses caused by the withdrawal of EU funds, leaving the impression that controls over Government spending were much better than when it came to European money.
If only it were so.
