EC Freezes Aid Funds To Bulgaria

BRUSSELS -- The European Commission issued a scathing indictment of corruption in Bulgaria on Wednesday, suspending aid worth hundreds of millions of euros and barring two key agencies from receiving EU funds.

A report on the management of European Union funds by the latest and poorest EU member said the fight against high-level corruption and organized crime was not producing results, and the commission had to act to protect taxpayers' money.

The two reports on Bulgaria -- one on funds and the other on judicial reform -- were the harshest criticism ever leveled by Brussels at a member state. A report on Romania, which also joined in January 2007, pointed to political and judicial obstruction of corruption trials but avoided sanctions.

Commission President Jose Manuel Barroso called them "a reality check -- they show that both the Bulgarian and Romanian governments need to step up their efforts on judicial reform, corruption and in the case of Bulgaria organized crime."

Analysts said the commission was trying to set an example to other Balkan candidate countries and to reassure voters disenchanted with the 27-nation bloc's eastward enlargement.

But the EU executive softened the blow at the last minute by toning down the tough wording of earlier drafts and omitting a threat to delay Bulgaria's entry into the euro zone and the Schengen area of passport-free travel.