Croatia and Slovenia reach border agreement

The Croatian parliament ratified a border arbitration agreement with Slovenia on Friday, hoping to lift a major obstacle for completing Croatia's European Union accession talks next year.

EU member Slovenia, which had blocked Croatia's membership talks for most of this year because of unresolved borders, will hold a national referendum on the border deal early next year and possibly ratify the agreement in the first quarter of 2010.

Slovenia agreed to lift its veto, imposed last December, in September, after the two prime ministers agreed to resort to international arbitration to resolve an 18-year old dispute primarily related to the sea border.

The two former Yugoslav republics have argued over their land and sea borders since becoming independent in 1991. "I believe that the coming years will confirm we were right to strike and propose this agreement to the parliament. If we do not accept the agreement now, no future generation will be able to reach a more favourable deal for Croatia," Prime Minister Jadranka Kosor told the deputies before the vote took place.

The ruling of an international arbitration team, the members of which will be proposed by the European Commission, will be binding for both countries.

The dispute involves a sliver of land on the Istrian peninsula in the northern Adriatic and demands by Slovenia - squeezed between Italy and Croatia - to have direct access to international waters, which could force Croatia to cede some of the sea it sees as its own.

The EU had tried and failed to achieve a breakthrough in six months of mediation this year. It then told Zagreb and Ljubljana to find a solution in direct talks.

Croatia hopes to wrap up the EU accession talks in 2010 and join the block in 2012. To achieve that goal it must push further the reform of slow judiciary, intensify the fight against corruption and organized crime and cut excessive subsidies to ailing industries, most notably shipbuilding.