In July 1997 the Commission of the European Union presented its Agenda 2000. This document not only suggested to start accession talks with some East and Central European countries (CEEC) in early 1998 but it also provided proposals for a restructuring of EU expenditures. On this background this contribution discusses the state of readiness of the Central and East European countries to become EU members over the next few years and the Union's capacity to absorb up to ten CEEC over the next decade or so. This study concludes that the European Union has become an anchor of stability to the CEEC that guarantees both democracy and economic security--much more than could be expected only a couple of years ago. The Union's readiness to accept the membership of CEEC has, in a decisive way, contributed to their societal, political and economic stabilization. There is almost a contest among the CEEC on which one is going to meet the accession criteria first and best. The enlargement process, however, is connected to problems the resolution of which realistically postpone its successful conclusion at least into the year 2005. The main reasons are (1) the welfare gap between the EU area and the CEEC, (2) the need for more institutional and economic changes in the CEEC to make them ready for acces-sion, and, most importantly, (3) the necessity for the European Union to prepare herself for accession by a comprehensive financial reform and fundamental institutional changes.