EU concerned at Bulgaria's economic data

The European Commission voiced concern yesterday over economic statistics provided by Bulgaria, which has already seen some EU funding axed, and may send an enquiry mission to Sofia.

"We have had some concerns as regards the statistical performance of Bulgaria and we are considering sending a mission shortly," EU Economic Affairs Commissioner Olli Rehn told a press conference after a meeting of EU finance ministers in Luxembourg.

Bulgaria, which joined the European Union in 2007, saw a total of €825 million in pre-accession aid frozen by the commission in 2008, with €220 million of it subsequently cut, amid corruption concerns.

There have been numerous arrests in recent months for kidnapping and misappropriation of EU funds although the Bulgarian government has accused the courts of taking too long to sentence the culprits.

The mission being considered would be one of the first under new powers of audit and enquiry set to be given to the EU statistics office Eurostat, which is under the control of the commission.

The Bulgarian finance ministry said it was "neither concerned nor surprised" by reports of a possible EU mission.

"This mission was expected after the announcement of updated data on the (2009) deficit," it added.

Bulgaria in April raised the estimate for its public deficit in 2009 to 3.9 per cent of output, according to Eurostat. Eurostat in late May raised its projection for the 2010 public deficit to 3.9 per cent of output, whereas the commission until then had been anticipating a shortfall of 2.8 per cent.

Finance Minister Simeon Djankov blamed the blow-out in the 2009 deficit on recently discovered contracts signed by the previous government worth 2.14 billion leva (€1.09 billion) which had not been funded.

An EU official yesterday insisted that finance ministers gathered here did not discuss fears of a Hungary-style problem in Sofia, far less the level of deliberate masking of data uncovered in Greece.

The new audit powers - first requested by Rehn's predecessor Joaquin Almunia in 2005 - were backed by ministers without debate but still need to be approved by the European Parliament.

The initiative was resurrected after a string of statistical errors in Greece's economic figures were disclosed by the Socialist government, which were blamed in part for accelerating Europe's debt and borrowing crisis.

Hungarian Prime Minister Viktor Orban meanwhile announced austerity measures to curb his country's rising budget deficit.

European and international financial markets have been uneasy over comments last week by Lajos Kosa, deputy leader of the ruling centre-right Fidesz party, comparing Hungary to debt-sticken Greece.