BULGARIA RISKS LOSING 'BILLIONS' OF EU FUNDS

Sofia risks losing billions of euros of EU development funds because of a failure to submit well-budgeted, corruption-free projects for financing, a Bulgarian parliament committee warned on Sunday.

The European Union has allocated 15 billion euros in post-accession funds to new member Bulgaria for 2007-2013.

But half way through the period, only 1.3 percent of the funds have been paid out, a huge majority of projects submitted by Sofia being rejected at EU level because of exaggerated budgeting and conflicts of interest.

Bulgaria's parliament committee on European affairs warned in its annual report that Sofia could lose much of the funds unless it can clean up its submission process.

Last year for example, Bulgaria approved EU-financed projects worth 1.4 billion euros, but only 72 million euros were paid out because of project "irregularities."

Ninety percent of rejected projects were overbudgeted, while many involved suspected conflicts of interest or corruption, committee head Svetlozar Tanchev said.

Red tape and cumbersome procedures were also to blame for part of the delays in getting funds to beneficiaries, the report said.

Bulgaria already risks losing 200 million euros, or 10 percent of its post-accession funds for road building and river transport on the Danube, unless it allocates the money by end 2010.

Despite major delays, Tanchev noted that the use of the European funds had improved in recent months.

Bulgaria, which joined the EU in 2007, has come under tight scrutiny for suspected irregularities in the use of EU money, with millions of pre-accession aid frozen and some subsequently lost for good over fraud concerns.