The Associated Press

Eastern European countries trying to join the European Union (EU) should focus their mid-term budget policies on fostering growth rather than on quickly imposing strict fiscal EU criteria, the European Commission said Tuesday.

Publishing its first-ever broad study report of the candidates' public finances, the EU executive also said that their fiscal policies needed to be "sound" despite pressure for high spending to overhaul their economies and adopt EU laws.

With its focus on growth, the report echoed advice to candidates from European Central Bank officials not to seek to adopt the euro too quickly after accession if that required dampening expansion with a tight fiscal policy.

"Medium-term budgetary policy should also pursue a structure of expenditure and revenues that effectively supports economic growth, " the report said.

Leading EU candidate Hungary welcomed the report, saying its conclusions were compatible with Budapest's economic plans.

The report covered eight candidates hoping to join the EU in 2004 -- the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. It also analyzed Bulgaria and Romania, which are expected to join later.