The European Commission postponed the decision regarding the accession date of Romania and Bulgaria to early October, to allow the two Balkan states to improve certain areas of immediate concern such as: corruption, reform of administration system, efficient allocation of farm subsidies and food hygiene control. The general outlook of EC's report was positive, improving from the previous one, but the Commission demanded further efforts enlarging the timeframe for the two countries to comply with EU standards and to proper implement the latest reforms.

Both countries were warned that they could lose substantial EU funds meant to upgrade the agricultural sector unless there are not set up proper agencies in this respect. Bulgaria received six red flags, while our country only four mostly of technical nature:
- partially non-operational payment agencies for EU farm aid;
- deficiency of the animal registration system needed for paying EU farm subsidies and unproper veterinary standards;
- poor means of animal treatment to prevent mad cow disease;
- tax collection system is not compatible with those of the rest of EU, preventing correct collection of VAT;

The total volume of pre-accession assistance available in 2006 for Romania reaches EUR 1,023mln.

Melania Hancila - Research Analyst
Treasury Division
Tel : 40 21 308 52 66
Fax : 40 21 301 09 61