Brussels, May 16 - The European Union told Bulgaria and Romania on Tuesday they can join the bloc in 2007 provided they pass a final review in early October of their fight against corruption and improve state administration.
In its keenly awaited progress reports, the executive European Commission said the two Balkan countries' entry into the 25-nation EU could still be delayed to 2008 if they do not show enough progress by then.
"The Commission considers Bulgaria and Romania should be prepared for membership by Jan. 1, 2007, provided they address a number of outstanding issues in the coming months," European Commission President Jose Manuel Barroso told the European Parliament in a statement.
The accession treaty, which the countries signed last year, gives the EU the possibility of delaying their accession until 2008 if they are deemed manifestly unprepared.
The report was more critical on Bulgaria than of the bigger Romania, giving Sofia red flags for dragging its feet on fighting corruption, organised crime and money laundering.
"Indictments, prosecution, trials, convictions and dissuasive sentences remain rare in the fight against high level corruption. Bulgaria needs to demonstrate clear evidence of results in the areas," it said.
Barroso said he and EU Enlargement Commissioner Olli Rehn would travel to Bucharest later on Tuesday and Sofia on Wednesday to explain the deferred final decision.
Diplomats and analysts say powerful crime barons control large parts of the Bulgarian economy and are behind scores of unsolved underworld assassinations this decade.
Romania's biggest shortcomings were mostly technical, such as EU-compatible computer systems for tax collection, poor food hygiene standards and a failure to set up agencies for paying the bloc's massive regional and farm aid.
Both were warned they could lose out initially on EU aid unless they swiftly create institutions to oversee the funds.
Romania, a Black Sea state of 22 million, and Bulgaria, which has 8 million inhabitants, are to receive EU aid worth 11.5 billion euros ($14.72 billion) and 4.6 billion euros, respectively, in 2007-2009.
ENLARGEMENT FATIGUE
The countries missed the EU's "big-bang" enlargement into central and eastern Europe in 2004 because their reforms were initially slow after the fall of communism in 1989.
The Commission's recommendation, due to be rubber-stamped by EU leaders in June, was a balancing act between the need to keep pro-reform drive in both countries and reassure the sceptical public that unprepared countries will not join the bloc.
Delaying the final decision on the entry date may leave little time for some national parliaments to ratify the accession treaty, although Germany has said it would start the ratification process so the countries could join in 2007.
Public support for further expansion has dwindled in Western Europe since the French and Dutch rejected the EU constitution in referendums last year, in which the "No" camps campaigned against expansion.
Many senior politicians, especially in France and Austria, would like to go slow on enlargement after the EU started entry talks last year with Turkey and Croatia, while other Western Balkan countries are queuing for membership.
Politicians and analysts say the pace of future expansion may depend on how quickly the EU approves a new treaty on institutional reform in place of the stalled constitution, since the current Nice Treaty envisages only 27 members in the bloc.
Even with delay, Bulgaria and Romania's entry is secure. But they are eager to join quickly to secure aid that will boost their already fast growth rates. The countries' economic output per capita is well below 40 percent of the EU average.
The Commission's final report used slightly softer language on Bulgaria's record on crime-righting than a draft seen by Reuters last week.
Prime Minister Sergei Stanishev has warned the EU against humiliating his country, saying any delay of membership would prompt an anti-EU backlash and slow down reforms.