EU delays final decision on Bulgaria/Romania entry

BRUSSELS, May 16 (Reuters) The European Union today told Bulgaria and Romania they can join the bloc in 2007 provided they pass a final review in early October of their progress in fighting crime and improving state administration.

The executive European Commission delayed a final recommendation on the two Balkan states' entry date into the 25-nation EU, saying it could still be deferred to 2008.

Criticism of Bulgaria in the progress report was more severe and focused on corruption, organised crime and money laundering, while Romania was mainly chided for technical shortcomings.

''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,'' Commission President Jose Manuel Barroso told the European Parliament.

In a separate decision, the EU executive gave a green light for Slovenia to become the 13th member of the euro zone next January -- the first east European newcomer to join the single currency -- but rejected Lithuania's euro bid.

The accession treaty, which Bulgaria and Romania signed last year, gives the EU the possibility of delaying their accession until 2008 if they are deemed manifestly unprepared.

But a senior EU diplomat said delaying either country to 2008, which would require a unanimous decision of the 25 member states, seemed very unlikely and the report was mainly intended to keep up reform pressure until the last minute.

The report gave Sofia six red flags on the most serious failings requiring urgent action.

''Indictments, prosecution, trials, convictions and dissuasive sentences remain rare in the fight against high level corruption.

Bulgaria needs to demonstrate clear evidence of results,'' it said.

Diplomats and analysts say powerful crime barons control large parts of the Bulgarian economy and are behind more than 150 unsolved Mafia-style assassinations this decade.

RED FLAGS Support in Western Europe for further expansion has dwindled since French and Dutch voters rejected the EU constitution last year, with the ''No'' camps railing against expansion.

Romania's four red flags focused on the absence of 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.

Romanian Prime Minister Calin Tariceanu welcomed the report: ''This is the best evaluation ever received by Romania.'' Bulgaria vowed to improve justice and law enforcement.

''For those who are used to living through corruption and flouting rules, and through crime, difficult times are coming,'' Prime Minister Sergei Stanishev said.

Both countries were warned they could lose out initially on EU aid unless they swiftly create agencies to oversee the funds.

Romania, with 22 million citizens, and Bulgaria, with 8 million, are to receive EU aid worth 11.5 billion euros and 4.6 billion euros respectively in 2007-2009. Both have per capita wealth less than 40 percent of the EU average.

They 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.

REUTERS SY VC2110