By Lewis Crofts - 26th May 2004
Two east German firms have had their fingers caught in the till after police raids suspecting the misuse of €21 million in EU social funding.
The Frankfurter Allgemeine Zeitung reports that the Dresden microelectronics firm ZMD, and a company offering training in the same sector, QMF, were raided in early May on the suspicion of pilfering EU cash.
The money should have gone towards retraining ZMD workers but was instead redirected into pay-packets, it is alleged.
QMF is also thought to have footed its insurance bill with some of the money.
Two people have been taken into custody.
The scandal has sent political shockwaves through Dresden which has long been fighting to retain lucrative hand-outs from Brussels.
Former east German regions such as Saxony previously bagged significant financial support from the EU, but following enlargement poorer areas further east now look more needy.
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