Serbia has made a huge leap towards its EU membership, as the country has been awarded with a EU candidate status by the bloc's leaders.

"The European Council granted candidate status to Serbia," says a draft post EU summit statement obtained by international media.

The 27 EU leaders have endorsed proposals to study the feasibility of a trade and political accord with Kosovo, known as a Stabilisation and Association agreement, the statement also reveals.

Ahead of the summit, Serbia and Romania reached a deal declaring mutual respect for the rights of each other's minority groups.

Romania had threatened to block Serbia's membership bid at an EU ministerial meeting on Tuesday, complaining about the treatment of the ethnically Romanian Wallachian minority by its Balkan neighbor.

Diplomats have stressed the EU's desire to reward Serbia's pro-western president Boris Tadic ahead of parliamentary elections expected in late April or early May. Tadic's Democratic Party is currently trailing in the polls.

In 2008, the signature of an EU trade and association deal, as well as a big investment announcement by Italian carmaker Fiat, helped Tadic defeat his nationalist challenger Tomislav Nikolic in presidential elections.

Last week, Serbia agreed to let Kosovo take part in Balkan meetings and to implement a previous border deal in EU-brokered talks.