Bulgarian Govt Reads Encouragement into Barroso's Criticism

Bulgarian PM Borisov (right) with EU Funds Minister Tomislav Donchev (left) at Thursday's news conference, explaing Barroso's letter on the absorption of EU money is especially encouraging. Photo by BGNES

The highly critical letter of EC President Jose Manuel Barroso about Bulgaria's failure to absorb EU funds has been described as "encouraging" and "the best we ever got" by the Borisov Cabinet.

Barroso's letter was received in Sofia Thursday morning; in it, the head of the European Commission outlines the facts about Bulgaria's absorbing to date only about 6% of the EU funds allocated to it under the EU Structural and Cohesion Funds.

Barroso outlines the failure to utilize EU money in the road construction, railways and water sectors as especially problematic; he recognizes that the Borisov government and its EU Funds Minister Tomislav Donchev harbor a potential to improve the situation, and offers expert help by the Commission in cooperation with international financial institutions.

"This is the most encouraging letter that Bulgaria has ever received from the European Commission. The first part of the letter comments on Bulgaria's slow speed of absorption in three sectors – road transport, railway transport, and water. All other sectors have not been mentioned as seeing delays," Minister Donchev commented at a news conference in Sofia together with Prime Minister Borisov.

"The second part of the letter expresses support for all actions undertaken by us and men with respect to the change and improvement of the EU funds distribution system, and pledges full support with respect to our initiative to work with international financial institutions to help increase our capacity and speed of EU funds utilization," Donchev elaborated.

Bulgarian Prime Minister Boyko Borisov thanked EC President Barroso and explicitly read paragraphs from his letter in which Barroso recognizes the commitment of the Borisov Cabinet ministers and deputy ministers on EU funds absorption.

According to Donchev, in mid January 2011, as promised by the EU Commissioner on Regional Policy, Bulgaria expects to get a permission from the European Commission to use the help of international financial institutions, and to pay their experts with EU funds.

The head of the European Investment Bank is also expected to visit Bulgaria in mid January for talks on expert help.

The Borisov government has already signed a preliminary memorandum with the World Bank for reforms in the railway sector, and the WB has pledged to help Bulgaria's structural reforms with expertise and know-how.

Bulgaria's EU Funds Minister pointed out that as of last week, 9.7% of all EU funding for Bulgaria has been absorbed, and that he expects that the percentage of absorption of funds under the ISPA program will reach 75%, and that it will be even higher with respect to the operational programs.

With respect to the Road Infrastructure Agency, which Barroso described as especially falling behind, Bulgaria's Regional Development Minister Rosen Plevneliev said it had an action plan called "the Bible" with deadlines, to which its staff is adhering.

Minister Donchev stated that Barroso has sent a similar letter to Romania, which is more critical, and which recommends that Romania should adopt measures already implemented in Bulgaria.

Bulgaria’s Environment Minister Nona Karadzhova and Transport Minister Alexander Tsvetkov said the government has already taken measures to address the EC criticism in the transport and water sectors.

Karadzhova said that while only BGN 40 M had been paid for EU funded projects under Operational Program Environment in Bulgaria by October 2009, since then BGN 240 M have been absorbed, and new projects on waste disposal worth BGN 300 M are expected to be approved shortly.

In the water sector the government is considering projects for about EUR 500 M, and expects to make contracts for water projects worth EUR 1 B in 2011.

She also pointed out that between 2003 and September 2009 Bulgaria absorbed a total of BGN 360 M under the ISPA program, and that since October 2009 another BGN 308 M have been absorbed.

Transport Minister Tsvetkov said that Barroso statement that only 10% of the railway projects have started referred to four projects – the Plovdiv-Svilengrad railway line, the Septemvri-Plovdiv line, the Dimitrovgrad-Svilengrad line, and the line from Svilengrad to the Turkish border.

EU Funds Minister Donchev said that since October 2010, the Bulgarian government got a total of EUR 250 M from the EU programs for the construction of the Sofia Metro, while PM Borisov reminded that the EC had approved the Cabinet’s EUR 250 M application for funding for the Trakiya Highway.

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