An elderly Bulgarian woman is seen with a European Union flag in the backgound in Sofia, yesterday. Bulgaria is the EU’s poorest member state after the country joined the bloc on January 1, 2007 and has remained under strict surveillance.

By Paul Taylor - Reuters

BRUSSELS – The European Commission issued a scathing indictment of corruption in Bulgaria yesterday, suspending aid worth hundreds of millions of euros and barring two key payments agencies from receiving European Union funds.

A report on the management of EU funds by the latest and poorest bloc 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.

“Therefore, the Commission has taken the decision today to formalize this (aid) suspension and withdraw the accreditation for two government agencies in charge of managing these pre-accession funds,” chief Commission spokesman Johannes Laitenberger told a news conference.

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 fellow newcomer 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.”

Bulgarian Prime Minister Sergei Stanishev promised action to remedy the shortcomings. “There is a discrepancy between the political will, which is a fact, and the achievement of concrete results,” he told a news conference.

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 toughest wording of earlier drafts and omitting a threat to delay Bulgaria’s entry into the eurozone and the Schengen area of passport-free travel.

The Bulgarian member of the Commission, Meglana Kuneva, told Reuters the report was balanced and her country needed to fulfill its obligations as a full member of the EU.

“We need to advance, and advance quickly,” she said in a telephone interview.