(SOFIA) – Former communist states Bulgaria and Romania celebrated Monday their New Year’s accession to the European Union even as new EU president Germany warned that painful reforms were still needed.

Tens of thousands were in the streets of the two newcomers’ capitals as midnight struck, marking the first day of 2007 and their entry into the EU.

The addition of the two former Soviet bloc states brought the number of EU nations to 27 and gave the bloc a total population of almost half a billion people.

In the Bulgarian capital Sofia, the blue and gold EU flag was raised Monday afternoon at the tomb of the Unknown Soldiers and President Georgy Parvanov promised that “Bulgaria will be a stable, predictable and trustworthy member of the European Union.”

Bulgaria and Romania each had a commissioner named Monday to the European Commission that is the EU’s executive arm.

Bulgaria seeks “to strengthen the European Union . . . with its ability to create security in a difficult and complex region such as the Balkans,” Parvanov said.

Romanian Prime Minister Calin Tariceanu spoke Sunday of “a reason to rejoice, an historic moment expected for 17 years” since the fall of communism in 1989.

Enlargement Commissioner Olli Rehn also said in Bucharest that the two newcomers “deserve congratulations for impressive reforms in strengthening democracy, modernising their countries, making their justice systems more efficient and independent.”

But German Foreign Minister Frank-Walter Steinmeier on Monday warned that Bulgaria and Romania still have hard work to do to fully meet EU standards.

“These two countries have now completed their ‘return’ to Europe, which began with the fall of the Iron Curtain”, said Steinmeier, who was in Sofia but whose comments were released by the foreign ministry in Berlin.

“We all know that they are still on the road towards full integration into European structures. Further progress will require considerable effort on the part of both states,” said Steinmeier.

Germany took over the rotating six-month EU presidency on Monday.

Bulgaria and Romania’s road to EU accession has been long, with repeated calls from Brussels for the two nations to crack down on corruption and organized crime in order to guarantee a properly working market economy.

By far the poorest in the EU club, the two Balkan states will be under strict surveillance for the first three years of membership owing to their marginal fulfillment of adhesion criteria, notably in the areas of justice and agriculture.

Their fellow members and the European Commission could impose sanctions against the two for shortcomings in their judicial systems or in the management of EU funds and food safety.

In Romania, streets were calm after jubilant all-night partying.

While no official festivities were planned in Bucharest Monday, the central town of Sibiu was preparing to mark its co-designation, together with Luxembourg, as “European capital of culture” in 2007.

Many Romanians had walked overnight Sunday to Monday to the western border with Hungary, sounding trumpets and with just local identification in hand in order to be the first to cross into their neighbor as fellow “European citizens.”

Romanians and Bulgarians also flocked to the only Danube bridge between their two countries early Monday to see the dismantling of border post barriers.

But other barriers remain.

Fearing a flood of cheap labor, Spain, Britain, Denmark, Hungary, Ireland, France and Greece have announced restrictions on workers from Bulgaria and Romania.

In any case, further enlargement is on hold, EU leaders had agreed December 15 in Brussels.

The decision has major repercussions for EU hopefuls in the Balkans such as Croatia, which is at the front of the queue and expected to join by 2010.

Slovenia meanwhile, which joined the EU in 2004, became at midnight there the first former communist state to adopt the bloc’s common currency, the euro. The changeover went smoothly with some banks open even on New Year’s Day.

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