Bulgaria's Cabinet will create a new agency that would oversee control over the utilisation of European Union funds, as well as help the beneficiaries of such financing, the country's ruling coalition agreed on May 10.

The new entity will be subordinated to Deputy Prime Minister in charge of EU funds spending Meglena Plougchieva, who will also take over the Bulgarian unit working with the European Anti-Fraud Office (OLAF), which was previously part of the Interior Ministry.

The changes were suggested from Brussels and adopted at the meeting of the ruling coalition council, meeting in Bansko on May 10-11. The issue of EU funding was the first discussed by the ruling parties, displacing the health care and Interior Ministry reforms, which were billed as top of the agenda before the meeting.

The European Commission has already frozen funding under all EU pre-accession aid programmes in recent months on suspicions of fraud and embezzlement, with OLAF carrying out several investigations in Bulgaria.

Another challenge for Plougchieva, appointed in the Cabinet re-shuffle on April 22, will be to improve communication between the Bulgarian institutions overseeing the utilisation of European funds and the EU.

In a report she presented on May 10, she said that letters from Brussels were often ignored by Bulgarian officials or resulted in misleading answers. The problem was endemic and a sign of both negligence and corruption, she said.

The meeting of the coalition council is also attended by all Cabinet ministers, Parliament committee heads and parliamentary floor leaders of the Bulgarian Socialist Party, National Movement for Stability and Progress and Movement for Rights and Freedoms.