Some Bulgarian firms have been turned around by EU grants

The BBC's Dominic Hughes has gone to see whether Bulgaria is doing enough to get the green light.

At the Todoroff wine cellar, manager Kiril Izmirov looks on proudly as we sip one of his vintages.

It's good stuff - a whole different class from the �1.99-a-bottle Bulgarian reds I remember from my student days.

A decade ago, this elegant boutique winery, 90 minutes drive from the Bulgarian capital Sofia, lay in ruins. Its glory days seemed to be behind it. But all that changed, thanks to a grant from the EU. Now it is producing high-quality wine for export.

Corruption

Kiril Izmirov tells me that this is one of the first businesses in Bulgaria to qualify for a grant from Brussels.

"Without that money, it would have taken much longer to restore the buildings and get back in business," he says.

It's very hard to separate one area out - to say, oh this is mafia corruption, this is some other corruption Michael Read

There are plenty of other Bulgarian ventures desperate to take advantage European largesse. The country desperately needs help re-developing its infrastructure.

But before the money starts to flow, Europe wants to see progress on tackling another deep-rooted problem - corruption and organised crime. Just ask businessman Michael Read.

"It's part of the country's custom," he says. The New Zealander has lived in Sofia for years now, and he is exasperated at the level of corruption he sees on a day-to-day basis.

"The whole thing is intermingled. It's very hard to separate one area out - to say, oh this is mafia corruption, this is some other corruption. No. They're all sleeping together; you don't know who's sleeping with who."

The battle against corruption is fought in the Palace of Justice, in the city centre. With its high vaulted ceiling and grand granite columns it certainly has all the trappings of a supreme court. And reforms to strengthen the rule of law are being put into place.

Paradox

But the European Union is worried that the criminal justice system itself is not up to standard; and that there is still too much political corruption. EU monitors have warned that reform has proved to be difficult and slow.

"Slow is an understatement," says Boris Velchev, the country's prosecutor-general and the man responsible for reforming the criminal justice system and fighting corruption.

Some areas of Bulgaria are desperate for development

"It's much slower than I would like," the former law lecturer says. He acknowledges that problems in both areas pose a potential threat to EU membership.

"They're obviously a very big obstacle. I believe that in order to prove a different style of operation by the prosecution authorities to the European Commission we need to show more practical results. But we also need to regain the trust of Bulgarian society.

"Unfortunately there are very few convictions. It is my aim to obtain more convictions, in order to prove that the system is not only working on paper but that it's really effective in practice. "

But here is a paradox: the immediate effect of EU membership - and all the millions of euros that would then flow into Bulgaria - could make corruption worse, not better.

At least that is the view of Boyko Todorov, director of an independent think-tank, the Centre for the Study of Democracy.

"If you have a fairly corrupt political environment, this could be counter-productive," he tells me.

PM Sergei Stanishev (left) has told the EU his country is doing its best

It seems the more money that flows into the system, the greater the risk corruption levels could actually increase.

"Unless there are added mechanisms for transparency, efficiency and accountability, yes, there is a danger that this could solidify really corrupt structures," he says.

The centre of Sofia looks and feels like part of the modern European family. It has certainly come a long way from its communist past.