While it is the seventh-largest future EU state, Romania is also among the club's poorest (along with Bulgaria), international media has been saying.

Both countries have a GDP per capita of about a third that of the EU average - a figure that most likely does not take into consideration their grey economies. In terms of economic and social perspectives and its loyalty to Europe, however, Romania will be a pleasant surprise for the union, Romanian president Trajan Basescu told  Deutsche Welle a day before the European Commission submitted its report.

This enthusiasm, however, cannot batter the EU enlargement scepticism that threatens to affect the rest of the Balkans after Romania's and Bulgaria's accession. According to a Euro-barometer opinion poll, about 53 per cent of EU citizens view enlargement with "indifference, fear, annoyance or frustration". Reasons for this include Romania and Bulgaria's consistently red record in the areas of justice, the fight against corruption, money-laundering and organised crime.

The latter are highlights of the September EC report on Romania. The environment, the capacity to implement structural funds, and intellectual property rights should also be of "outstanding concern" to Romania, the EC report says.

According to the EC report, Romania should do the following about its justice and home affairs (JHA) sector: ensure a more transparent and efficient judicial process; ensure a fully consistent interpretation and application of the law in all courts because certain members of the Superior Council of the Magistracy (CSM) continue to face potential conflicts of interest; report and monitor the impact of the new civil and penal procedures codes; establish an integrity agency with responsibilities for verifying assets, incompatibilities and potential conflicts of interest; continue to conduct professional, non-partisan investigations into allegations of high-level corruption; take further measures to prevent and fight corruption, particularly in the local government.

Further political will is needed to make progress in judicial reforms irreversible, even if Romania introduced criminal liability for legal persons; new legislation tightening the rules on the financing of political parties; and a multitude of high-level corruption investigations, the report says. 

If Romania or Bulgaria fail to implement the outlined JHA measures, the EU may refuse to recognise their judgments in civil and criminal courts for up to three years after accession. The risk for this is much greater in Bulgaria, though. Safeguard measures in the economy and internal market areas can also be introduced up to three years after accession and even prior to accession. Measures in the spheres of veterinary, phytosanitary and food safety  could also be taken for a within three years after accession. Once in place, they would be applied until the EC decides to lift them.

Romania should address shortcomings in its public ministry, the report says. Other areas demanding "further progress" are the integrated administrative control system for agriculture (IACS), paying agencies, transmissible spongiform encephalopathies (TSE, also known as Mad Cow disease), and the interconnectivity of tax systems, the report says. IACS regulates 80 per cent of agricultural expenditure in both countries, which makes it extremely important. However, both countries started preparations to set up IACS and payment agencies too late and risk their malfunction, the report says. If they fail to establish proper control over them, they risk losing billions in agriculture subsidies. The EC can interrupt, suspend or cancel subsidies at any time during the run of the funded programmes, as is the case with all EU funds and all EU countries, the report says. To guard from funds misappropriation, the EC will have Bulgaria and Romania commission external audits of the agencies that will pass Brussels money on to farmers from December next year, the Financial Times said. If these checks find lax controls or fraud, a quarter of the cash will be withheld, the Financial Times said.

Both countries have made progress with regard to the collection and treatment of dead animals and animal by-products, the report says. However, they do not completely comply with it. If that continues to be so by January 1 2007, both may face restrictions on the use of certain animal by-products.

Romania needs to show further progress in the areas of social policies and employment, including public health, genetically modified organisms, motor insurance, capital requirements for credit institutions and investment firms, money laundering and the fight against fraud and corruption, financial management and control of future structural funds and animal diseases, the report says.

The report noted Romania's progress in macroeconomic stabilisation and economic reform. (As Basescu told the Deutsche Welle, economic growth in Romania has been higher than six per cent for six years in a row and predicted at 7.5 per cent for 2006. Capital was also flowing in. The country expected to receive 32 billion euro from the EU, and supplement it with 30 billion of its own, Basescu said.)

Romania also showed progress in the areas of people trafficking, detention conditions, restitution of property and child protection. Romania, however, needs to do better at treating people with disabilities, caring for the mentally sick, and protecting and integrating minorities. The European Monitoring Centre on Racism and Xenophobia will continue to monitoring both Romania and Bulgaria in these areas after accession, the report says.

Romania also needs to fully align with EU external positions, such as on the International Criminal Court, the report says.