We examine the state and structure of public finances in the ten states which joined the European Union in 2004. In terms of budget balances and debt, there are signifi- cant differences among these countries. At one end of the range, public finances in Baltic countries and Slovenia are particularly sound, with deficits below 3% of gdp or surpluses in the last years and very low levels of debt. At the other extreme, there is Hungary, which will need strong political determination in the coming years to respect the conditions for accession to the Euro. Most of the remaining countries were able to bring the deficit at or below the 3% threshold in 2005, but often benefiting from particularly favourable cyclical conditions or from measures with temporary effects. In perspective the ageing of population, particularly accentuated in the ten countries, will burden public finances. To curb the growth of expenditure, most of these states have implemented major reforms, especially of the pension systems, introducing compulsory funded schemes.