The government decided to allocate BGN 207mn (EUR 105.8mn) to projects under the financial agreement of the pre-accession programme PHARE for 2005. The financing will cover payments contracted by the two responsible units at the finance and the regional ministries who lost their accreditation last year. Last month, the cabinet allocated BGN 100mn to compensate for funds which did not accrue under the PHARE programme. Last year, the European Commission froze payments for a total of about EUR 300mn under the three pre-accession programmes (SAPARD, ISPA, and PHARE) and instructed local authorities to block national co-financing. EC did not restore the licences of the two local payment agencies for utilisation of pre-accession funds under the PHARE programme that resulted into irrevocable withdrawal of EUR 220mn (0.6% of last year GDP).