The hundreds of millions of euro, frozen by the European Commission (EC) under the Phare, ISPA and SAPARD programmes for alleged malfeasance, will be covered from the budget surplus, local media reported after the two-day meeting of the leading coalition in Bansko.

Bulgaria's Prime Minister Sergei Stanishev said on July 27 that he would ask each of the agencies involved in absorption of EU funds to carry out careful inspections of projects under the Phare and SAPARD programmes and to determine which projects have the highest priority for the further development of these programmes, mediapool.bg said.

The EC had asked the Bulgarian government to not fund payments under SAPARD with national funding. However, Government expressed its hope that the plans it had adopted for the improvement of monitoring of EU funds absorption would lead to either a release of the money under the programme or an extension of the term for its absorption, mediapool.bg said.

Bulgarian daily Dnevnik quoted unnamed sources who took part in the meeting as saying that, according to calculations from the Finance Ministry, this fall 1.4 billion euro could be spent from the budget surplus, though this amount could still increase.

Dnevnik quoted Stanishev as saying that the budget surplus would primarily be used to fund infrastructure projects and to increase the income of pensioners with a Christmas bonus. One year before general elections, the bonus was expected to be more generous than in previous years when pensioners received a one-time bonus of 100 leva each.

Most of the 2007 budget surplus was spent on infrastructure projects through the Road Infrastructure Fund, the same fund that was barred from spending EU funds in early 2008 under suspicion of malfeasance, which were later confirmed in audit reports.

After the EC suspended two Bulgarian Government agencies from the EU funds process, Bulgaria effectively has no access to EU funds for infrastructure.