Bulgaria, Romania to join EU 2007 but may lose cash

BRUSSELS, Sep 25 (Reuters) The European Commission will tell Bulgaria and Romania tomorrow they can join the European Union in January but may forfeit hundreds of millions of euros in membership benefits unless they shape up quickly.

A keenly awaited progress report by the EU executive, seen by Reuters, will give a green light for the Balkan duo to join the EU in 2007, rather than 2008, but it will propose the toughest entry conditions ever imposed on newcomers.

The mixed message from Brussels reflects widespread public unease about further enlargement of the 25-nation bloc.

The conditional sanctions are meant to reassure critics of enlargement who say the countries are too poor, corrupt and weak administratively to cope with EU membership, officials say.

Doubts about east European newcomers have been raised by instability in some of the biggest states that joined in 2004, highlighted by anti-government riots in Hungary and the break-up of Poland's conservative-populist coalition last week.

Unless Bulgaria and Romania meet reform targets set in the report, the Commission may propose excluding them initially from some common EU policies and freezing part of the bloc's aid for agriculture and regional development.

The EU executive cites ''a number of areas ... where the Commission will initiate appropriate measures to ensure the proper functioning of the EU, unless the countries take immediate corrective action,'' the draft report said.

Those include corruption and organised crime, especially in the case of Bulgaria, weak courts and state administration and insufficient food safety standards. Their agencies to allocate billions of euros in EU aid are not fully operational yet.

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