The maintenance of stability-oriented fiscal-monetary policy mixes through the EU accession period is more important for the sovereign ratings on Bulgaria and Romania than the precise timing of

EU entry, Standard & Poor's Ratings Services said in the report "Bulgaria and Romania Sovereign Ratings: A Tale of Two

Policy Mixes,” published on Wednesday.

The S&P report examines the constraining factors of the two countries in the wake of the European Commission report released on May 16.

"EU membership itself will unlock large amounts in structural and cohesion funds, and if properly invested, these could contribute significantly to improvements in the economic structure of Bulgaria and Romania, providing support for future rating upgrades," said Standard & Poor's credit analyst Remy Salters.

In the light of the previous enlargement in May 2004, Salters also draws attention to the destabilization effect on the short created by the EU funds that require cofinancing from the state’s budget.

The very low levels of Romania’s revenues and expenditures creates the need for expanding the tax base, improving tax collection, and raising taxes where possible, close monitoring of the evolution of current spending.

The report also emphasizes the fact that both Bulgaria and Romania are posting high current account deficits, at 12% and 9% of GDP, respectively, in 2005, exposing the countries to financing risks from external sources.