The conspiracy theory that the European Union and states on both sides of the Atlantic are busy rearranging the electoral map of eastern Europe to their own advantage has never been more fashionable.

The conspiracy theory that the European Union and states on both sides of the Atlantic are busy rearranging the electoral map of eastern Europe to their own advantage has never been more fashionable.

The unexpected outcome of Sunday's Romanian presidential election deals this theory an embarrassing knock. Prime Minister Adrian Nastase, the leader of the Social Democratic Party (PSD), has gone down to defeat. Before 1989, he had been a fervent supporter of the tyrannical Nicolae Ceausescu, lecturing visiting Soviet officials that Mikhail Gorbachev's perestroika had destroyed communism. But EU notables from Tony Blair to Silvio Berlusconi have established a close working relationship with him and dismissed allegations that he presided over a corrupt authoritarian regime.

Indeed, so confident was Nastase that he enjoyed the ear of Blair that he declared in October that it was his intention to intervene with No 10 to ensure that the English Football Association gave a mild punishment to Adrian Mutu, Chelsea's Romanian former striker found to have a cocaine habit.

In the first round of elections held on 28 November, thousands of electoral monitors from civil independent observers as well as the independent media, documented systematic vote-rigging by the PSD in its strongholds. But the EU spurned pleas to send observers to the second round. Instead, it intensified efforts to close negotiations with Romania so that it would be invited at this Friday's meeting of the European Council to join the EU in 2007.

Brussels has badly stumbled in Romania. With Britain to the fore, it has established a cosy relationship with a predatory ruling elite. It is one that has no interest in seeing the political and economic standards that the EU is supposed to enshrine ever take root in this Balkan state of 22 million people.

Due to its size and location, Romania could not be left out when the EU decided to expand eastwards in the late 1990s. When negotiations began four years ago, Adrian Nastase and his party were warned not to return to corrupt and authoritarian ways. But gradually, the EU officials in charge of negotiations were worn down and outwitted. They scaled down expectations dramatically, enabling the PSD to get away with cosmetic reforms, leaving the bureaucracy and the legal system thoroughly penetrated by the ruling party.

Many EU officials internalised the weary and cynical perspective that a party like the PSD has to be the chief partner of Brussels because its ethics and behaviour exactly match those of the country. In the past few months EU diplomats have echoed the view that Romania can only become a fully Western democracy far in the future. Therefore, no sleep should be lost if the ruling party gets carried away in its zeal to remain in power.

Such views were fashionable in the diplomatic community of Belgrade for a decade until the late 1990s. Slobodan Milosevic, the Serbian leader, was viewed as a tough cop necessary to police a wild neighbourhood. Nastase has capitalised on such low expectations, but he has also looked for weak spots in the EU. The main one is that its leading economy, that of Germany, has been in recession. He has offered infrastructure projects to major German and also French companies on very advantageous terms to them. It is no coincidence that on 3 December, Chancellor Schröder and President Chirac issued a joined statement insisting that negotiations with Romania must be wrapped up this Friday in the face of considerable evidence that Romania was far from ready.

But the whirlwind rise of Traian Basescu has upset the EU's plans. This former sea captain with a frank and outgoing personality is the standard-bearer of the centrist Alliance for Truth and Justice. He warned that, if elected, he would repudiate the major deals recently signed with Western companies if they are to the disadvantage of the Romanian taxpayer. He also promised to deal sternly with public corruption in a land where 10 per cent of the average monthly income of £80 is reckoned to go on bribes to public officials.

Basescu is the first individual without a background in the Communist Party who has risen to the top since 1989. Last Wednesday, in a gripping television duel, he demolished his complacent challenger. Sunday's election was much freer owing to the mood of popular anger that had slowly welled up about the abuses committed in the first round. Basescu persuaded voters that he was capable of breaking up a corrupt system in which 30 individuals are worth €13bn (£9bn), a quarter of the GDP. Much of the EU funding has found its way into the pockets of a selfish oligarchy which has sprung up in a society once modelled on rigidly egalitarian North Korea.

If the EU wishes to salvage its reputation in Romania, it should look again at the poor terms Nastase has negotiated for Romania. They will prevent domestic commerce, agriculture and industry effectively competing with established EU states. Brussels should welcome the plain-speaking Basescu as a leader because he shows promising signs of wishing to spearhead genuine reforms that will make Romania a properly governed state able successfully to take its place inside the EU.

The author is professor of east European politics at Bradford University. His 'Theft of a Nation: Romania Since Communism' is published this month