CORRUPTION BLIGHTS BALKAN EU BIDS
The European Commission says Bulgaria and Romania must root out corruption and speed up reforms in order to join the EU on schedule in 2007.
The Commission also said it wanted to see borders more tightly controlled and standards of food hygiene raised.
Both countries were urged to improve systems for managing EU farm subsidies.
But the Commission said they should be able to meet the EU requirements before a decision next year on whether or not to let them join on schedule.
If they fall short on reform, their entry into the EU could be delayed until January 2008.
'Serious concerns'
In an annual progress report, the commission's enlargement commissioner, Olli Rehn, said Bulgaria and Romania had made significant progress in their preparations for accession.
Both countries have introduced ambitious legal reforms and improved enforcement of EU rules on state aid.
The possibility of joining in 2007 was not lost, but making it "will require a lot of work from both countries", he told the EU assembly.
Mr Rehn said areas of serious concern applied to about 10% of the EU legislation Romania and Bulgaria were required to adopt.
"The failure to obtain even a single significant conviction for high-level corruption in recent years, despite commonly available information on its scale, is a cause for serious concern," he said.
Organised crime in Bulgaria, industrial pollution and public procurement in Romania, human trafficking and improving the protection of intellectual property in both countries also remained concerns.
"In the months to come, particular attention must be paid to actual implementation and enforcement of the reforms," Mr Rehn said.
Having missed the last big wave of EU expansion last year, Bulgaria and Romania signed an accession treaty in April.
But only four of the EU's 25 member states have ratified it so far, amid public fears that the Union has already gone too far, too fast, says the BBC's Oana Lungescu in Strasbourg.