The European Commission has confirmed that Bulgaria and Romania are on track to join the EU in 2007 - provided they continue key reforms.
Coming up roses? Bulgaria and Romania could join in 2007
But the commission proposes a clause that could delay their entry by a year if they fail to keep their commitments.
The report must still be endorsed by EU governments in December.
Bulgaria and Romania, the poorest countries in the former communist bloc, missed the first big wave of eastwards expansion last May.
Now the European Commission says they should be able to sign a joint accession treaty early next year and fulfil the criteria for membership by January 2007.
For the first time, Romania is described as a "functioning market economy". But the commission says much remains to be done in both countries.
CANDIDATES TO JOIN EU
Bulgaria and Romania may join in 2007
Turkey could start membership talks in 2005
Croatia hopes to catch up Bulgaria and Romania - but will be hard pressed to do so
Macedonia made an official application on 22 March 2004
Among areas for concern are corruption, ethnic minority rights, trafficking of women for prostitution, illegal state aid to industry, media freedom, inadequate food hygiene standards and environmental pollution.
The report said Romania "remains the country of origin, transit and destination for victims of trafficking in human beings".
"The main targets of traffickers are young women and girls who are sexually exploited in destination countries," it said.
Bulgaria is seen as much better prepared than its larger neighbour, but the EU is still insisting on the unprecedented safeguard clause which could delay accession by a year, to 2008, if either Bulgaria or Romania prove manifestly unprepared for EU membership.
The entry of Romania and Bulgaria will give Greece, which joined in 1981, a
land frontier with another member of the European bloc for the first time.
Entry conditions for the next in line will be even stricter.
Croatia will start negotiations early next year, but their pace will no longer depend on mere commitments on paper.
They will be driven by real reforms on the ground, which may take much longer to prove.
The EU also reserves the right to suspend negotiations in case of what the commission calls a serious and persistent breach of the principles of liberty, democracy, respect for human rights and the rule of law.