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BRUSSELS, June 22 (Reuters) - After years of ambivalence about new members, European Union policymakers are hoping Croatia's accession to the 27-nation bloc will persuade other aspirants that democratic reforms reap dividends. The ambition is that Croatia's progress will show the western Balkans that the EU is still willing to grow and quell concerns that "enlargement fatigue" -- rife since the global economic crisis made Europeans wary about the cost of expansion -- means reform efforts are futile.

But Zagreb may now be days away from completing its entry talks and EU leaders are set to give a go-ahead to its accession at a summit on Thursday and Friday. EU officials say the leap was made possible by an intense reform push that proved the country of 4.4 million people was serious about fighting widespread corruption.

Croatia is almost there but it would take at least 2 more years of monitoring and ratification by the existing EU member states to become the 28th member of the European Union. But the country passed a big hurdle as the European Commission has decided to recommend Croatia to the EU member states. "The European Commission has just proposed... to close the last four chapters in the accession negotiations with Croatia," the European Commission President Barroso said in a statement.  Mr. Barroso's statement came following successful completion of talks on reforming the Croatian judiciary which was a sensitive issue.

Brussels - Croatia's efforts to reform its judicial system, fight crime, prosecute war criminals and protect minorities are still not good enough for European Union membership, a report concluded Wednesday.

The negative findings meant the commission was unable to recommend closure of talks with Croatia on the judiciary and fundamental rights, a key step towards accession.

But European commission president José Manuel Barroso has been more cautious, saying that the end of 2011 is more likely while EU enlargement commissioner Stefan Füle warns that Croatia's last leg to accession "would be the hardest".Good progress was made in December in closing three more negotiating chapters.But the difficult chapter eight, concerning competition, still remains. Along with the fight against corruption and judicial reform, it is seen as a key test for Croatia's accession.Many believe Croatia may have to close some of its five shipyards if it is to be successful in convincing the commission that it is serious about eliminating unnecessary state aid for its shipbuilding industry.

Romania is threatening to create problems for Croatia's EU accession bid in a diplomatic counter-attack against delays to its own entry into the EU's border-free Schengen zone. Romanian foreign minister Teodor Baconschi in an interview with the daily newspaper Adevarul on Monday (3 January) attacked Germany and France for linking Romania's Schengen bid to progress on corruption and organised crime.

EUobserver understands that this option is not really feasible however, as the monitoring was a jointly agreed commitment of Bulgaria and Romania when they joined the bloc. "It's unwise to give it up if you want something else at the same time," one EU official told this website. For its part, Croatia has already been held hostage by its neighbour Slovenia, which in recent years delayed its EU accession progress over a maritime border dispute. Romania's sabre-rattling seems to be directed primarily at Germany - Croatia's main supporter in the EU - rather than the Balkan state itself. But it could, in theory, delay the process. Croatia is hoping to finish EU accession talks in the coming months. EU governments and the European Parliament then have to approve and ratify its accession treaty, with membership likely to happen in 2013 if everything goes smoothly.

Mr Petkov's allegations reflect a dire image painted by EU officials in talks with US diplomats in Sofia, as reported in a US cable dating back to 26 June 2009 and published by WikiLeaks. Under the headline "How to you make them reform when they don't want to?" the US diplomats spoke of EU commission officials' "growing and by now extreme frustration with Sofia's cosmetic fixes to get a 'good report' while failing to undertake real reforms." "The government's defensive arrogance - and lack of political will - is intensifying enlargement fatigue in Brussels," an EU source told the US diplomat. "According to reliable contacts, Brussels Eurocrats have dubbed enlargement fatigue the 'Bulgarian Break,' further tarnishing Bulgaria's bad image within the EU," the cable added.

Croatia advanced in its bid to become the European Union’s 28th member, moving closer to wrapping up entry talks by the middle of 2011. Croatia completed negotiations on EU justice, environment and foreign policies, leaving talks open in only seven of the EU’s 35 policy areas.

Croatia has missed self-set deadlines before, as domestic reforms lagged and the souring European economy stirred opposition to further enlargement after the EU expanded beyond the former Iron Curtain from 2004 to 2007. It now aims to sign its entry treaty in the second half of 2011. What follows is European Parliament approval and ratification by all 27 EU governments, a process Fule said can take “plus/minus 18 months.” That would put Croatia on track to become a member sometime in 2013.

Bulgaria and Romania's accession to the Schengen area and Croatia membership of the European Union are among the top priorities of the incoming Hungarian EU Presidency, government officials told EurActiv in Budapest ahead of the executive's official visit to the European Commission on Wednesday (17 November).

Hungary will assume the EU presidency for their first time in January 2011. Budapest is keen to do well, especially on EU enlargement, which could impact upon the sizeable Hungarian minorities who live beyond national borders.

The enlargement of the Schengen area to include Romania and Bulgaria is on top of the presidency's agenda. However, the admission date of March 2011 "is likely to be delayed," admitted a Hungarian government official. Nevertheless, the presidency will work to help facilitate the accession of both Southern Balkan countries to the area of free movement of citizens within the EU.

The European Commission's latest progress reports on Bosnia and Herzegovina, Croatia, Kosovo and Macedonia have revealed wide variation between these neighbouring Balkan states and mixed progress towards EU accession requirements.

Bosnia and Herzegovina: Poor governance

The governance of Bosnia and Herzegovina (BiH) is one of the most complex problems facing the Balkan region, according to the European Commission's latest progress report on the country.

"The EU's enlargement process has gained new momentum since the [European] Commission adopted its last progress reports, notwithstanding the many other challenges the Union faces." These are the opening words of the European Commission's Enlargement Strategy, which will be officially presented next Wednesday (10 November) together with the progress reports for the Western Balkan counties, Turkey and Iceland. WAZ.EUobserver has seen the report in advance.

"All need to focus on good governance, improving the rule of law, speeding up economic reform and improving their capacity to adopt and implement the acquis. Several complex problems remain, including the governance of Bosnia and Herzegovina and the name question concerning the former Yugoslav Republic of Macedonia. Open bilateral issues remain and differences over Kosovo's status have held up regional co-operation," the strategy underlines.

Croatian President Ivo Josipović paid his first official visit to Serbia yesterday (18 July), during which he discussed resolving all open issues with his host, Serbian President Boris Tadić. Josipović said the two countries, which were at war from 1991 to 1995, no had longer any reason to "look back at the past". BETA agency, EurActiv's partner in Serbia, reports.

The two presidents told a news conference later on that they each supported the European integration of the other country. The presidents also said the issues that were standing in the way of better relations between the two countries included those of refugee returns in Croatia, the border dispute between Serbia and Croatia, the question of missing persons, minority issues and the protection of minority rights. As for Croatia's genocide suit and Serbia's counter genocide suit before the International Court of Justice (see 'Background'), Tadić said he supported an out-of-court settlement, while Josipović said the genocide charges were the result of certain problems and if they could be solved out of court, then "all the better for that".

On his first tour of the Western Balkan, European Council President Herman Van Rompuy condemned the recent violence in Kosovo and called for restraint and dialogue. An extraordinary session of the UN Security Council will be held on the matter today (6 July).

Serbia unhappy with pace of EU integration Later in the day, Van Rompuy met with Serbian President Boris Tadić in Belgrade. According to an official communiqué, the two leaders discussed the situation in "Kosovo and Metohia," as Belgrade officially calls its former province. The press also reported that Tadić will attend an extraordinary session of the UN Security Council in New York today, called at the initiative of Serbia. According to the statement, Tadić voiced his dissatisfaction with the slowdown in the European integration process, and insisted that speeding up Serbia's EU accession was crucial for the future of the Western Balkans. Last month, Serbia took another step towards EU integration when EU foreign ministers agreed to start implementing an accord with Serbia known as the Stabilisation and Association Agreement (SAA). The agreement had been blocked for several years, mainly as a result of the Netherlands' insistence that Belgrade must cooperate fully with the UN war crimes tribunal for the former Yugoslavia. Later today, Van Rompuy will be in Pristina to meet the president of Kosovo, Fatmir Sejdiu. A visit to the headquarters of the EU's rule of law mission in Kosovo, EULEX, is also on the agenda.

Although Belgium is among the most cautious in the European Union when it comes to enlargement, there is a good chance that its forthcoming EU Presidency will be particularly productive in this policy area. At their presentation of the upcoming Belgian presidency's priorities last Friday, Yves Leterme, Belgium's caretaker prime minister and its foreign minister, Steven Vanackere, sounded much like their colleagues from the Netherlands - and not just because they spoke Dutch. The Belgian approach to enlargement is similar to the stance in the Hague: no promises, no dates, just "strict and fair" rules.

The next six months could mark important progress for the Western Balkan countries despite Belgium's cautious line. Croatia could close all but one of the negotiation chapters. Macedonia is close to getting a date for the opening of accession negotiations with the EU. Montenegro can count on a positive "avis" (opinion) from the European Commission for its candidate status. The Serbian application could be forwarded to the EU commission for an opinion on Serbia's readiness to become a candidate as well. Kosovo might receive some kind of a roadmap for its Stabilisation and Association Agreement (SAA) with the EU. Bosnia-Herzegovina and Albania can hope for visa liberalisation before the end of the year. Croatia is well-placed to close all its negotiation chapters, with the exception of the famous No. 23 on Judiciary and Fundamental Rights, which will remain to be concluded during the Hungarian Presidency in the first half of 2011. Still, problems could emerge with othe chapters, for example competition. Macedonia is close to finding a win-win solution to its name dispute with Greece. Talking to WAZ.EUobserver, EU diplomats in Brussels expressed cautious optimism that the name problem could be solved in the next months. This would allow the EU finally to set the date that Skopje has been waiting for since 2005 - for formal negotiations to start on Macedonia's entry into the EU.

The upcoming Belgian EU Presidency has not specifically cited enlargement among its top priorities but is widely expected to help Croatia and Iceland reach important milestones in their accession bids over the next six months.

Croatia is expected to conclude its EU accession negotiations during the Belgian EU Presidency, while Iceland will formally start membership talks, political analysts told EurActiv. Although officially Belgium is being "discrete" as to its intentions (see 'Background'), Croatia can expect to finalise membership talks during Belgian Presidency, which starts on 1 July, according to Piotr Maciej Kaczyński of the Centre for European Policy Studies (CEPS) in Brussels.

Serbia's president on Saturday warned the financial crisis gripping Europe must not be allowed to derail the Balkans' hopes of joining the European Union, ahead of a crunch summit with the bloc."The policy of the European Union's enlargement must not be interrupted at any price," President Boris Tadic told a conference of regional leaders, held in Sarajevo ahead of a vital EU-Balkans summit on June 2.

Tadic was meeting with Croatian President Ivo Josipovic, Montenegrin President Filip Vujanovic and their colleagues from the Bosnian tripartite presidency, namely Muslim leader Haris Silajdzic.Officials and media across the Balkans have expressed concern that the ongoing debt crisis could slow down the enlargement process, with new members perceived as a potential threat to the bloc's financial stability.

Chief UN Prosecutor for the International Criminal Tribunal for the former Yugoslavia (ICTY) Serge Brammertz held talks on Tuesday (4 May) in Brussels with EU Enlargement Commissioner Stefan Füle, Croatian press agency HINA reports.

The press in Croatia reports that few details emerged from the meeting. However, it is widely assumed that Brammertz was able to give his assessment of Croatia's cooperation with the ICTY, as he had previously indicated.The high-level Belgian prosecutor, who replaced the Swiss Carla Del Ponte on 1 January 2008, said he expected Croatia to submit to the ICTY prosecution military documents on the so-called 'artillery files' case (see 'Background') and to be engaged in intensive dialogue.Several EU member states blocked Croatia's EU entry talks in chapter 23 - which concerns the judiciary and fundamental rights - over the artillery files, which the ICTY wants and Croatia claims it cannot locate.The impasse was broken in mid-February when the Netherlands withdrew its reservations about opening chapter 23 and Croatia was invited to submit its negotiating position for the chapter as part of its EU accession negotiations.

Yesterday (19 April) Zagreb closed the free movement of goods policy chapter of its EU membership negotiations and passed the halfway mark in the road to accession, with 18 out of 35 chapters now provisionally closed.

Yesterday (19 April) Zagreb closed the free movement of goods policy chapter of its EU membership negotiations and passed the halfway mark in the road to accession, with 18 out of 35 chapters now provisionally closed.

Speaking yesterday after an intergovernmental conference in Brussels, Croatia's chief negotiator Vladimir Drobnjak stated that free movement of goods is one of the most important chapters in terms of the EU's internal market.Drobnjak said the closure of the chapter "speaks volumes" about Croatia's progress and readiness to take on the acquis communautaire – the body of EU law.Croatia, which is set to become the first country to join the European Union since Romania and Bulgaria did so in 2007, is aiming to complete its accession negotiations by the end of the year (EurActiv 11/02/10).

The EU accession process of Croatia, Turkey and the Former Yugoslav Republic of Macedonia was high on the CoR agenda Wednesday evening. After hearing from Štefan Füle, Commissioner for Enlargement and Neighbourhood Policy, the CoR adopted its opinion on enlargement strategy and the main challenges for the candidate countries tabled by rapporteur Georgios Papastergiou, Prefect of Pieria (EL/EPP). The debate among CoR members focused in particular on the progress made by Turkey and the relations between Turkey and Greece. The opinion assesses the progress made by each of the candidate countries on the road to accession and voices the CoR's considerable concern that many of the political commitments made by the candidate countries are not sufficiently transposed into concrete action on the ground.

Addressing the national parliament of Bosnia and Herzegovina during an official visit to Sarajevo on Wednesday (15 April), the Croatian president extended condolences and sympathy to every victim of the 1992-1995 war in Bosnia-Herzegovina (BiH), emphasising that every life lost was a loss for everybody.He said he would travel to Ahmici and Krizancevo Selo in the Lasva Valley on Thursday to pay his respects to victims "whose only sin was that they belonged to the other side and were different".

He added that a new era had come in which the mistakes from the past times should be recognised and a new course should be set bringing lasting peace, stability and prosperity to the region.Josipovic said a common European future is the best solution, adding that he was confident his country would soon become a European Union member. He underlined Croatia's support for its neighbours' EU membership bid."The European Bosnia-Herzegovina is a vital national interest of Croatia," Josipovic said.

Sweden remains committed to EU enlargement, Foreign Minister Carl Bildt said, even while reiterating the key role Sweden plays, saying membership in the bloc “is the best way to safeguard our values and national interests in an increasingly complex world.” He noted that “by allowing the doors of the EU to remain open, we make a considerable contribution to peace and democracy on our continent,” citing the Western Balkans, where there has been considering disagreement over whether countries riddled with corruption, economic woes and failure to catch accused war criminals should become part of the EU.