Ongoing Corruption

The commission interim report notes that a number of high-level corruption probes remain blocked by the Romanian parliament and that vacancies within the judiciary remain "unacceptably high.

"It is important that the Romanian authorities regain momentum on judicial reform and the fight against corruption so as to reverse certain backward movements of recent months," the report states.

Adrian Nastase, a former prime minister, is currently under investigation over allegations that he raised funds illegally during his failed presidential campaign of 2004.

But parliament's judicial committee last week narrowly rejected a request from prosecutors that Nastase stand trial. The Nastase probe is just one of many to have attracted meddling by the country's politicians.

Anti-graft boss controversy

Another high-profile controversy concerns the dismissal and subsequent reinstatement of the country's anti-corruption chief, Daniel Morar.

Morar, who enjoys the backing of the European Commission, has been particularly active in fighting corruption, launching probes against eight former and current ministers, including Nastase.

Meanwhile, the government has been unable to fill hundreds of vacancies for the posts of judge and prosecutor.

'Progress must be shown'

The commission is due to issue its next report on Romania in the summer.

"It will be crucial for Romania to achieve significant, irreversible progress by then," Thursday's interim report stated.

"Romania must demonstrate the existence of an autonomously functioning, stable judiciary which is able to detect and sanction corruption and preserve the rule of law." At stake for Romania is millions of euros in EU funding.

The commission said that by quickly addressing several existing high-level corruption cases, Bucharest would signal its ability to implement its laws independently and efficiently.

Commission: Bulgaria developments positive

Last summer, Bulgaria became the first EU member state to suffer such sanctions when the commission blocked nearly 500 million euros ($648 million) in aid in a bid to convince Sofia to stop corruption and organized crime.

In November, Bulgaria lost about half that amount for good after officials in Brussels said it could not be trusted with the money.

But Thursday's interim report did mention that Sofia had taken "some initial steps" towards improving its judiciary.

Bulgaria and Romania, which joined the EU in 2007, are two of the bloc's poorest countries.