When EU foreign ministers met in the Swedish town of Nyk÷ping last month, the mood was unusually fractious. Germany and Austria repeated their demand for a seven-year delay before workers from central and eastern Europe could work elsewhere in the EU. But Spain threatened to veto any such arrangement unless it received a guarantee that its poorest regions would continue to receive EU funds after new states joined.

As the ministers prepared to go home, Sweden's Anna Lindh, who chaired the meeting, sought to put a brave face on the conflict. "It's not surprising that difficult issues will arise now because we are entering the endgame of the enlargement negotiations," she said.

There is certainly a new sense of urgency about the negotiations , as if EU politicians are suddenly waking up to the enormity of the task they have set themselves. Because, whatever way you look at it, enlarging the EU to the east is a project of breathtaking dimensions.

The EU has enlarged four times within the past 30 years. But none of the previous enlargements has been on the scale of what is now under discussion - and - and the risks involved in failure have never been so great.

The 12 candidate countries in negotiations have a combined population of more than 100 million and would swell the EU population to almost half a billion. They stretch from Estonia in the north to Slovenia in the south and would push the EU's borders so far east that a Russian enclave - Kaliningrad - would be surrounded by EU states.

Their level of economic development varies widely; Slovenia and Cyprus are already more prosperous than some EU member states while Bulgaria's GDP per capita is only a quarter of the EU average. Taken together, however, the candidate countries have a GDP per capita that is less than 40 per cent of the EU average. To put these figures in perspective, Ireland's GDP per capita in 1973 was more than 60 per cent of the EEC average.

Most of the candidate countries are former communist states in central and eastern Europe that have had just 10 years to undo the legacy of half a century of dictatorship. This process has involved not only the painful establishment of a market economy, but also the construction of democratic institutions, a complete overhaul of corrupt legal systems and the creation of a civil society. The candidate countries undoubtedly view EU membership as a passport to future prosperity, and the current member states can look forward to economic benefits from an expanded single market. But the primary motivation on both sides is political: the creation of a democratic, peaceful area of political cooperation across the whole of the formerly divided continent.

Germany's former chancellor, Dr Helmut Kohl, who famously declared that European political union was "a question of war and peace", was convinced that the EU could widen to accept new members without threatening the "deepening" process of further integration. Britain saw enlargement to the east as an opportunity to create new alliances with states that were likely to share London's cautious approach to pooling sovereignty.

France, initially worried about the prospect of a new German sphere of influence in central and eastern Europe, persuaded the EU to open accession talks with three Mediterranean countries: Turkey, Cyprus and Malta.

Irish policy makers concluded that the accession of new states, most of which are small countries, represented an opportunity rather than a threat. Many eastern - European countries look to Ireland as a model of how to make the most of EU membership.

Accession negotiations started in 1998 with Poland, the Czech Republic, Hungary, Estonia, Slovenia and Cyprus. Bulgaria, Latvia, Lithuania, Romania, Slovakia and Malta entered negotiations a year later. Turkey has the status of a candidate country but has not begun formal negotiations, partly because of EU disquiet over Ankara's record on human rights and treatment of minorities.

Candidate countries must show they are stable democracies with functioning market economies. They must also agree to adopt the acquis communautaire - almost 70,000 pages of laws and regulations already in force through out the EU. The process of adopting these rules is laborious and expensive, often involving the passage of new laws in national parliaments.

Although the EU provides "pre-accession" funding and offers expert advice, most of the cost of preparing for enlargement is borne by the candidate countries themselves.

Support for EU membership has been falling in many candidate countries and a majority of Estonians now opposes joining. In Poland, a majority still favours membership but 30 per cent of the population would prefer to stay out of the EU. During the accession negotiations, candidate countries can ask for "transitional periods" to take account of difficulties in implementing all EU rules immediately. It will take years, for example, for many former communist countries to undo the environmental damage of half a century.

Poland wants a lengthy delay before foreigners will be allowed to buy agricultural land, partly out of anxiety that wealthy Germans will b u y up great swathes of land in formerly German regions such as Silesia and Pomerania. The EU can ask for transitional arrangements too, however. Hence the German demand for a seven-year delay on the free movement of labour from new member-states.

Among the most difficult questions is the future of Polish farming and access to EU subsidies. More than 20 per cent of Poles live on the land - compared with 5 per cent in the EU. EU budget plans up to 2006 make no provision for extending direct income support to Polish farmers and the EU may seek to phase in payments at a lower level.

The issue is highly sensitive in Poland and senior Polish officials believe that unless a satisfactory solution is found, Poland could vote against joining the EU.

As the negotiating pace accelerates, the candidate countries are engaged in a frantic race to close negotiating chapters and to secure a place in the first wave of enlargement. Some senior diplomats predict that enlargement will take the form of a "big bang" with up to 10 countries joining at once. Under this scenario, Bulgaria and Romania are likely to have to wait.

The Commission hints that a smaller group will join around 2004 or 2005 - probably including Poland, the Czech Republic, Estonia and Slovenia.

Beyond the present negotiations, the EU has held out the prospect of future membership to all the countries in the former Yugoslavia, along with Albania. The EU hopes to conclude stabilisation and association agreements with each country, promoting political dialogue and economic links within the region as well as with the EU.

The EU is working towards looser forms of co-operation with Ukraine, which is not yet regarded as a suitable candidate for full membership. And a succession of association agreements links the EU to the Mediterranean countries - from Morocco to Jordan.

In the meantime, the EU is engaged in a wide-ranging de bate about its future political shape - involving fundamental questions of how power is shared between national governments and Brussels and between the European institutions.

As the EU prepares to expand, it will face a formidable task in reconciling greater diversity with effective decision-making and ensuring that the free peoples of Europe remain in command of their own political destiny.