Croatia`s EU Reforms May Falter On Slovenia Veto

Croatia has so far closed only seven out of the 33 negotiation areas and has yet to open talks in 11 chapters.

Croatia's reform efforts are at risk if Slovenia continues to block its bid for European Union membership, a senior Croatian lawmaker warned on Monday, a day before the first meeting of the two countries' prime ministers.

EU-member Slovenia vetoed 11, or roughly a third, of negotiating areas in Zagreb's EU bid in December, over a border row that dates from 1991 when the two quit communist Yugoslavia.

"At the moment, we're on track to meet all criteria for a successful completion of membership talks on time. However, unresolved political issues could undermine all our reformist efforts," opposition leader Vesna Pusic, who chairs a parliamentary committee for EU accession, told Reuters.

"This is the gravest danger resulting from the current stalemate," she said in an interview.

Analysts say Zagreb will not be able to complete accession talks this year as planned unless a solution to the dispute is found in the next few weeks.

"There are still (political) groups which don't welcome reforms and benefits they bring, like fighting corruption, and they would raise anti-EU rethoric," said Pusic.

Slovenia has welcomed the EU's offer of mediation but Croatia wants the issue to go to the International Court of Justice in The Hague.

Prime ministers Ivo Sanader and Borut Pahor will meet on Tuesday to discuss how to move on, but Pusic said it was hard to predict if the veto would be lifted any time soon.

"There is a huge uncertainty about it. I believe the issue should be separated from the accession talks, but Slovenia seems opposed to it. The EU mediation should not be tasked with defining the border, it should define the best way to resolve the row," she said.

If Slovenia lifts its veto soon and Zagreb continues to cooperate with the U.N. war crimes tribunal, Croatia would be on track to wrap up the talks this year, Pusic said.

Croatia has so far closed only seven out of the 33 negotiation areas and has yet to open talks in 11 chapters.

"Everything will be much clearer at the end of March, when an EU-Croatia bilateral conference takes place," Pusic said.

The key EU requirements are reforms of the slow judiciary process and ailing shipbuilding industry, and an intensified fight against corruption and organised crime.

Pusic said new Justice Minister Ivan Simonovic, who took office in October, had taken resolute steps to overhaul the judiciary and fight corruption, while the heavily subsidised local shipyards should be ready for a sell-off in March.