BLANTYRE, Malawi : The European Union on Saturday called on impoverished Malawi to rapidly deal with rampant corruption after President Joyce Banda fired her entire cabinet in an unprecedented move to restore donor confidence.

Banda dissolved her cabinet on Thursday in the wake of a massive fraud scandal that has rocked her government this month. “Systems have to be rapidly rectified, accounts to be audited, culprits be identified and charged, and trust and confidence must be re-established, not superficially but substantively,” the EU ambassador to Malawi, Alexander Baum, said in a statement. One of the key donors to Malawi’s budget, the EU on Thursday warned that that it would withhold its 29m euro scheduled payout due in December until the authorities proved they were tackling graft.

Ten government employees have been arrested over the past two weeks on suspicion of swindling more than $3 million from state coffers in a scandal dubbed the Capital Hill cash-gate scandal, named after the seat of government.

The EU diplomat said “accountability for fraud, theft and corruption has been consistently low” since 1994 when the country held its first multi-party election after three decades of autocracy under Kamuzu Banda.

Malawi, which depends on foreign donors to bankroll up to 40 percent of its budget, “has failed in a number of financial performance indicators with government found wanting in the management of public funds,” he said.

Baum said corruption and theft of public funds had been “a systematic failure of government and governance in Malawi for a long time, even though to varying degrees.”

Despite the scandal, the EU was still committed to working with the Malawi government but would help the country “in other ways”, not channelling funds though government systems “unless there is a serious correction of the situation.”

“It is not right to punish the people of Malawi for wrong-doings within the government system.”