The European Commission is preparing the harshest sanction for the mismanagement of funding by the Bulgarian authorities: withdrawal of the accreditation of two payment agencies for the disbursement of Phare money, says a draft EC report on EU fund management obtained by Dnevnik.

That document will accompany the center-piece EC report on Bulgaria's justice reform performance due out on July 23.

A similar sanction has not been enforced in respect of another EU member state so far. It would mean that Brussels will revoke Sofia's right to negotiate EU funding and decide how it is spent.

The two agencies that could lose their accreditation are the Phare executive agency with the regional development ministry and the central financing and contracting unit of the finance ministry.

Finance and regional development ministers Plamen Oresharski spent Thursday dodging reporters.

If the initial reaction to the scathing criticisms from the incumbents is anything to go by, they are unlikely to cost the job of any of the cabinet ministers.

A politician from NDSV said that as with all of the preceding reports, this too will be 'perused, bounded, numbered and archived and life will go on.'

The parliamentary opposition parties will submitted a no-confidence motion against the government on July 24.

The unprecedented penalty is imposed over the inability of the Bulgarian authorities to ensure the stable financial management of the funds and eradicate the irregularities, said the document.

Bulgaria may forfeit 610 mln euro in Phare funding alone over the recent string of graft scandals concerning the spending of pre-accession funds.

The document further warns that the funds that have been absorbed will be reviewed and may have to be reimbursed.

Bulgaria may also be stripped of 144 mln euro in suspended ISPA funding and 133 mln euro in suspended SAPARD funding. That decision will be taken in the fall.

If the accreditation withdrawal happens, Bulgaria will need at least a year to reverse the process.

The time that will be wasted could prove crucial as the deadline for the contracting of the Phare funding is November 2008 while the implementation of the program and the payment disbursements should be completed by 2011.(Dnevnik)

Financia Group, the financial services division of Bulgarian conglomerate Alfa Finance Holding, said it has completed the acquisition of 51% in insurance broker Broker Ins.

The current owners of the brokerage, Rumen Staikov, Stean Enchev and Konstantina Dragieva, will retain a stake of 49% as well as full executive management control.

As a result of the deal, Broker Ins clients will get access to services like mutual funds and trust management provided by Financia Group.

Financia Group will establish a similar synergy will with Eurobroker in Macedonia.

Financia Group comprises investment brokerage Bulbrokers, corporate finance advisor Bulbrokers Consulting, asset manager Alfa Asset management and Alfa Credit, a special purpose vehicle for the securitisation of receivables.

Alfa Finance Holding owns a majority stake in over 60 Bulgarian companies active in financial services, real estate management, mining and logistics.(Dnevnik)

The competent authorities will step up the policing of motor third party cover of local motorists under changes to the ordinance regulating the exchange of information between the Guarantee Fund and the interior ministry.

The interior ministry will report on an ongoing basis the names and addresses of uninsured motorists to the Guarantee Fund. The fund, for its part, will notifying in writing the motorists that they are in breach of the requirement for a motor third party cover.

If the at-fault motorists fail to sort out their third party cover in the ensuing 14 days, the police will initiate a procedure for the impounding of the uninsured vehicle.

At the moment, the fund's hands are tied because it doesn't have the addresses of the uninsured motorists that have been reported to it.

The penetration of motor third party coverage was reported at 83.6% by the end of June.(Dnevnik)

Sparky Eltos, the Bulgarian maker of power tools, said H1 unconsolidated revenues jumped 50% to 37.8 mln levs.

The net profit of the company rose by a hefty 87% to 5.7 mln levs year-on-year.

Sparky Eltos explained the upside with successful efforts to expand its market reach and with a pick-up in demand for its enhanced line of products.

In late May, Sparky Eltos and Sanyo Europe clinched a deal for joint production of li-ion batteries. The project is expected to be generating 8-10 mln euro in sales by the end of 2009.

In its interim Q1 report, Sparky said sales were projected at 89.1 mln levs for 2008 and at 113.2 mln levs for 2009.

Gross profit was forecast at 14.2 mln levs for 2008 and at 20.1 mln levs for 2009.

The company stock added 2.20% to close at 9.30 levs on Thursday.(Dnevnik)

The site in the area of the Sofia International Airport that was eyed by the Plovdiv International Fair is classified as green area and any title transfer will first have to be approved by the chief architect of the city, Petar Dikov, it emerged at a government meeting on Thursday.

At the same meeting, the government gave the go-ahead to transfer the site from the assets of the transport ministry to those of the economy ministry.

Dikov could not be reached for comment on Thursday.

The economy ministry will next contribute the site to the balance sheet of the Plovdiv fair. It will be developed into a Sofia branch of the fair.

The proposal to provide the site to the Plovdiv fair came from transport minister Petar Mutafchiev.

Economy minister Petar Dimitrov has also endorsed the idea of setting up branches of the fair in other cities.(Dnevnik)