The European Commission's Agriculture Directorate General has recommended Bulgaria to refrain from payments under two more SAPARD Programme measures, "Development and Diversification of Economic Activities" and "Investments in Agricultural Holdings," Bulgarian Deputy Prime Minister Meglena Plougchieva told a news conference on Friday.

Bulgaria is expected to prepare an action plan with specific commitments and measures and present it to the Commission.

Plougchieva dismissed media allegations that funding under the Operational Programme for the Bulgarian Fisheries Sector has been suspended. "Funding cannot be suspended for lack of fishing ports, and you can't suspend funding under a programme which has not yet started," the Deputy PM said. As she put it, work is underway to eliminate the delay of this programme.

All road projects financed by the Phare Programme are being carefully analyzed, one problem has been detected at the National Road Infrastructure Fund. Plougchieva said. The analysis of the ISPA projects should be ready on Monday, June 30, and the Deputy Prime Minister will meet with the ministers to discuss the road projects, the ISPA projects and to finalize the discussion on the Operational Programme Transport, which covers the Strouma and Maritsa motorways and part of the Hemus Motorway.

On Friday, Agriculture and Food Minister Valeri Tsvetanov ordered the formation of a ten-member working group, chaired by State Fund Executive Director Dimiter Tadarukov, which was given until June 30 to analyze the findings of the European Commission's May 26-30 audit under the SAPARD Programme. By July 15, 2008, the group must prepare an action plan of specific commitments and measures to cope with the weaknesses detected in audited SAPARD projects. The working group will visit Brussels on July 1 to clarify the problems ascertained in the two SAPARD measures.

Approached for comment on the new suspension of SAPARD funding, Finance Minister Plamen Oresharski told journalists in Parliament that the move was prompted by irregularities detected by the latest audit missions in Bulgaria but was unable to specify the amount of resources involved. He hopes that no more funding under European Commission programmes will be frozen.

Michael Mann, Spokesman for EU Agriculture and Rural Development Commissioner Mariann Fischer Boel, told BTA Correspondent in Brussels Atanas Matev that letters were sent to the Bulgarian authorities on Thursday presenting the results of a May 26-30 audit under the SAPARD Programme and recommending further action. The audit found considerable flaws in the control systems, especially in the supply procedures. The Bulgarian authorities were requested to provide more information on particular cases, as well as to submit, by July 31 at the latest, an action plan on addressing the systematic weaknesses, the Spokesman added.

Payments for Bulgaria under SAPARD measures 1, 2 and 3 will not be resumed before the Commission is satisfied that the action plan is implemented adequately, Mann said. Earlier this month, he denied statements in Bulgaria about early release of frozen funding for Bulgaria under SAPARD. He said then that Commission experts had visited Bulgaria and were preparing their report, after which the Commission would determine its reaction. He
noted that an answer on the frozen SAPARD funding can be expected within a couple of weeks.

In a declaration issued on Friday over the suspension of SAPARD funding, the Parliamentary Group of right-wing opposition Democrats for Strong Bulgaria (DSB) urged for the immediate replacement of the Agriculture State Fund, which acts as a Paying Agency for the SAPARD Programme.

According to the DSB, "the Government has been deliberately misleading the MPs and the Bulgarian public at large and bears the full blame why Bulgarian agricultural producers will not receive the EU subsidies to which they are entitled."

The Parliamentary Group insists that the opposition accelerate preparation for the submission of a motion of no confidence in the Sergei Stanishev Cabinet "over the failure of Bulgaria's EU membership."

In a letter to Prime Minister Sergei Stanishev, occasioned by the suspension of SAPARD funding by the European Commission, GERB Party Chairman Tsvetan Tsvetanov insists on the dismissal of Agriculture State Fund Executive Director Dimiter Tadarukov, GERB said in a press release.

Tadarukov must go because of "the serious violations and irresponsibility at the Agriculture State Fund which have prompted a series of critical reports by the European Commission and the suspension of 80 million leva under the SAPARD Programme," the letter reads.

Since the launch of the SAPARD Programme, a total of 1,880 projects subsidized by 523 million leva have been approved and contracted under the "Investments in Agricultural Holdings" measure, the Agriculture and Food Ministry said. Of these, 308 million leva subsidies have been paid on 1,341 projects, and 269 projects worth 95 million leva have been cancelled. Two hundred and seventy projects subsidizable by 96 million leva remain to be implemented and paid under the measure. The financial assistance amounts to 50 per cent of the investment expenditures approved. The EU and Bulgaria's national budget share the costs of the assistance in a 75:25 ratio.

An aggregate 706 projects with a subsidy of 169 million leva have been approved and contracted under the "Development and Diversification of Economic Activities" measure.