This analysis examines the role o f the European Community in the transition to democracy and a market economy in Romania. Specifically, the EC admission criteria developed during the second enlargement (viz., the democratic reform of. economic transformation of. and foreign policy of applicant states) are applied to a case study o f Romania in order to understand why Romania was offered associate membership in the EC. It is found that both EC and Romanian officials see Romania's associate membership as a vehicle for further political and economic reform within that country. An implication is that the EC may view further Southeastern enlargement as a hedge against instability in the region.