Croatia celebrates becoming latest member of the EU

A street scene is reflected in the window of a library with an EU flag on display in downtown Zagreb, Croatia, which joins the EU on July 1.

ZAGREB // Croatia became the 28th member of the European Union at midnight last night, a milestone capping the Adriatic republic's recovery from war but tinged with anxiety over its economy and the state of the bloc it has joined.

EU flags fluttered from a stage in a central square of the capital Zagreb ahead of the evening's festivities, but there had been few signs of the gushing welcome that marked past expansions to ex-communist eastern Europe.

Croatia joins the bloc just over two decades after declaring independence from federal Yugoslavia, the trigger for four years of war in which about 20,000 people died.

Facing a fifth year of recession and record unemployment of 21 per cent, few Croatians are in the mood to party.

The EU is also troubled by its own economic woes, which have created internal divisions and undermined public support for the union.

"Just look what's happening in Greece and Spain. Is this where we're headed?" asked pensioner Pavao Brkanovic at a Zagreb market. "You need illusions to be joyful, but the illusions have long gone."

The Croatian president, Ivo Josipovic, said on Saturday that journalists from EU countries had repeatedly asked him why Zagreb wanted to join the bloc.

"My counter question was: 'You come from the EU. Is your country preparing to leave the bloc?' They would invariably reply: 'Of course not'. Well, there you go, that's why we are joining, because we also believe the EU has a future," he said.

The country of 4.4 million people, blessed with a coastline that attracts 10 million tourists each year, is one of seven that emerged from the ashes of Yugoslavia during a decade of war in the 1990s.

Slovenia was first to join the EU, in 2004, but Serbia, Bosnia, Macedonia, Montenegro and Kosovo are still years away.

To get to this point, Croatia has had seven years of tortuous and often unpopular EU-guided reform.

It has handed over more than a dozen Croatian and Bosnian Croat military and political leaders charged with war crimes to the United Nations tribunal for the former Yugoslavia in The Hague.

It has sold shipyards, steeped in history and tradition but deeply indebted, and launched a high-profile fight against corruption that saw the former prime minister, Ivo Sanader, jailed.

Some EU capitals remain concerned at the level of graft and organised crime.

The spirit of the occasion took another knock when the German chancellor, Angela Merkel, the bloc's most powerful leader, pulled out of the accession ceremony, saying she was too busy.