During the outgoing week, the Deputy PM in charge of economic policy Ekaterina Zaharieva held talks in Brussels with Regional Policy Commissioner Johannes Hah and with officials from DG Regional and Urban Policy in the European Commission. The sides have discussed options to resume suspended payments on the part of the European Commission under the Environment Operational Programme and the Regional Development Operational Program in the sections of Tourism and Urban Development.

Bulgaria is now subject to financial corrections to the tune of 100 million euro following malpractice in holding public procurement tenders in projects for the water cycles under the Environment Programme in the period from 2010 to 2013.The Commission has demanded a “flat” financial correction of 10%.

Next week Bulgaria is expected to inform the Commission officially that it accepts this offer. The penalty has to do with abuse of public procurement tenders made mostly by local governments. However, they do not have the necessary budgets to pay back the so-called corrections. Therefore President Rosen Plevneliev has urged the caretaker cabinet ministers to arrange for the payment of corrections from the state budget. For the purpose the budget will be updated after the parliamentary elections in October.

The former government supported by the Bulgarian Socialist Party and the Movement for Rights and Freedoms advocated the opposite view, namely that local governments should take on the burden of paying corrections following violations of EU public procurement procedures committed by them. In all honesty however, central administration had its own share in malpractices. A similar approach will be used in the currently calculated financial corrections on the Regional Development Operational Programme in its sections of Tourism and Regional and Urban Policy. Audits are expected to close by the end of the month and in preliminary estimates financial corrections are likely to come to 50 million euro.

Ekaterina Zaharieva specified that money for these corrections was not lost. Bulgaria will have access to that funding but for other projects under the Environment Operational Programme, she recalled.

In Brussels the Bulgarian Deputy PM has discussed work on the next programming period of Regions and Growth Operational Programme. Progress has been made on the issue of projects of 28 small towns. The condition is to observe the competitive principle in the selection of projects with key criteria including growth, creation of new jobs and protection of the demographic potential.