|Croatia's Prime Minister Jadranka Kosor was warmly welcomed into the fold by other European leaders [REUTERS]
Europe's leaders embraced Croatia as the EU's 28th member on Friday but dashed the hopes of its former Yugoslav neighbour Serbia to clear a new hurdle in its longstanding bid to join the club.
As Zagreb signed an European Union accession treaty, Belgrade was prodded to make further progress in defusing tension on the north Kosovo border and normalising relations with Pristina, after its 2008 breakaway.
Croatia's signature follows almost a decade of long and often fraught negotiations.
"We are finally crossing the threshold of our European home," Ivo Josipovic, Croatia’s president, said. Along with Prime Minister Jadranka Kosor, Josipovic signed the legal paperwork at a ceremony attended by the EU's 27 heads of state and government.
The signing ceremony was the culmination of a long-held ambition, but comes at a tough moment as Europe's debt crisis undermines the unity of the bloc and saps the enthusiasm of ordinary Croatians.
Before Zagreb can formally join the bloc on July 1, 2013, citizens will get to vote on the question in a referendum early next year.
The latest survey suggested that around 60 per cent of Croatians would back EU membership.
Croatia is the second of the six Balkan republics that formed the former Yugoslavia, which collapsed in a series of 1990s bloody wars, to join the bloc.
Of the six - Bosnia, Croatia, Macedonia, Montenegro, Serbia and Slovenia - only the latter is an EU member, since 2004.
The signing of the treaty marks a historic chapter for Croatia 20 years after it proclaimed independence, sparking a four-year war with Belgrade-backed rebel Serbs.
With a population of 4.2 million, its economy is based mostly on Adriatic coast tourism. It has been largely in recession since early 2009 and the official growth forecast for this year is a modest 0.5 per cent.
Unemployment is running at above 17 per cent.