EU Commission's assessment of candidate countries

The European Commission issued its annual progress reports yesterday on the 10 mainly Eastern and central European countries set to join next May and the three candidates up for later membership.

The newcomers are Poland, Cyprus, the Czech Republic, Malta, Estonia, Hungary, Latvia, Lithuania, Slovakia and Slovenia.

The EU has said Bulgaria and Romania could join in 2007. It will assess next year if Turkey is ready to begin entry talks.

The Commission made many recommendations for the candidates, most of which are poor former communist states, on what to do to be fully ready for accession. All of them must strengthen administrative systems and courts.

Here are some of the key recommendations to each candidate, listed in alphabetical order:

BULGARIA Progress in aligning laws to EU requirements, notably amendments to the constitution, confirm that Bulgaria is well on track to join the Union in 2007, but the state administration and courts are weak and prone to fraud.

Bulgaria should complete the sell-off of state assets, slash budget subsidies for ailing industries and relax its rigid labour code to be competitive in the EU.

The government needs to pay special attention to combating drug trafficking and illegal migration.

It should further improve conditions for people in institutions, especially the mentally handicapped, and complete reforms of child care systems.

CYPRUS Must improve shipping safety and agriculture payment mechanisms, the Commission said, giving Cyprus a generally upbeat assessment of its preparations.

The report tiptoes around the political division of the island which threatens to derail Turkey's hopes of joining in the near future.

Cyprus needs to improve safety measures for its fleet. Its public finances are worsening, the report said.

CZECH REPUBLIC Must improve food safety system, pass regulations to allow for mutual recognition of qualifications in some professions, upgrade laws on transport and speed up reforms of pension, social benefit and health care systems.

The macro-economic situation remains stable, with the country remaining on the reform path "hesitantly", but public finances have deteriorated.

Administration and courts have been strengthened, but corruption remains a problem.

ESTONIA Should urgently overhaul its labour law and ensure equal treatment for women and men in the workplace. Must introduce regulations to allow for mutual recognition of qualifications in some professions.

Economic performance remain solid, but "expansionary fiscal policy" poses a risk to macro-economic stability, especially due to a widening current account deficit.

HUNGARY Must "take immediate and decisive action" to set up agencies that will handle EU farm subsidies, improve hygiene standards at food-processing plants and work harder in preparing rural development programmes.

The Commission notes that Hungary's macro-economic situation has worsened, especially external accounts as well as exchange and interest rate stability. Wage growth continues to exceed productivity gains. Fight against corruption should continue to be priority. LATVIA Must urgently upgrade to EU standards its tax system in the area of VAT, improve operations of its customs service, which needs a better computer system. It must urgently improve its profession qualification system.

Should fight corruption, strengthen its administration, reduce backlogs on court cases and better oversee its food safety system.

Latvia is praised for "firm" economic activity and pursuing structural reforms.

LITHUANIA Although lauded for strong economic performance, especially in 2002, Lithuania was rapped for failing to formulate a comprehensive fiscal strategy that includes all pending financial obligations of central and local governments.

The most serious "areas of concern" are the lack of a fishery control system and incompatibility of the country's professional qualifications system with that of the EU.

Must speed up work on setting up agencies that will pay out the EU's farm subsidies, step up the fight against corruption and organised crime and improve cooperation with the EU in migration and asylum policies.

MALTA Must respect commitments on curbing state aid for shipyards, boost maritime safety measures and step up efforts to set up agencies needed to pay out the EU's farm subsidies.

Malta should strengthen very weak administrative capacity in the area of environment and introduce a better veterinary control system. Economic activity remains weak, the number of non-performing banking loans is high and the overhaul of state-owned firms half-hearted.

POLAND Received the longest list of things to do before accession among the 10 newcomers, with the most urgent task being the creation of agencies needed to join the EU's multi-billion-euro farm aid system.

Warsaw needs to cut state spending to prevent ballooning government debt from throwing public finances into disarray. It should speed up privatisation of state assets and restructure heavy industries, such as mines, steel and chemical sector.

Poland must upgrade its food hygiene and veterinary standards, set up a controls system for fisheries and pass regulations to allow for mutual recognition of qualifications in some professions, notably in the health sector.

The government must do nothing to infringe on the central bank's independence during negotiations on releasing reserves.

It has to do more to root out fraud, shore up the weak civil service, combat money laundering, better protect intellectual property rights and upgrade public procurement laws to be able to tender projects to be financed with EU funds.

ROMANIA Failed to win the status of a "functioning market economy", a crucial step for Romania's bid to join the EU in 2007. To achieve the tag next year, the government must implement a structural reform programme in a "vigorous and sustained way."

Romania receives the worst ratings on corruption among the candidate countries. "Corruption continues to be widespread and affects all aspects of society." the report says.

The country needs to improve decision-making and legislative processes. It made good progress in many areas related to human rights, such as child protection and Roma minority treatment.

SLOVAKIA The Commission is seriously concerned over Slovakia's failure to adhere to agreed steel production caps, notably in the case of steelmaker US Steel's Slovak unit.

Slovakia must speedily set up an agency to handle aid payments under the EU's farm policy and upgrade food hygiene standards. Needs to keep up anti-fraud drive.

Slovakia's economic performance is improving, but authorities should pursue further fiscal consolidation and improve financial sector and market supervision.

SLOVENIA Praised for "a relatively robust macroecnomic performance", although inflation remains a key concern.

The only area of "serious concern" is the incompatibility of Slovenia's professional qualification system with that of the EU. The country must keep on fighting corruption and better protect intellectual property rights. The government must finally liquidate the Slovene Development Corporation, the government's investment fund.

TURKEY Showed "great determination" in accelerating political reforms needed to win EU membership, but their implementation is uneven. Progress has been achieved on human rights - freedom of expression and assembly and of religion.

The report urges Turkey to support a United Nations plan to end the division of Cyprus, noting that the country has no plan to establish a customs union with the northern part of the island.

Turkey needs to boost the efficiency and independence of courts and limit the role of the military in the administration.

Turkey is urged to continue reforms to achieve macroeconomic stability, reduce high inflation and keep fiscal discipline.

Ankara should privatise state banks and companies more speedily, simplify bureaucratic procedures, lift key barriers to foreign investment and combat piracy and counterfeiting.