The Stabilisation and Association Council has welcomed the achieved macroeconomic stability of Croatia, emphasising that Croatia should continue more resolutely with the fiscal consolidation.
The Council has established that continuing the implementation of reform programmes, including the restructuring and privatisation of companies, and improving the business climate, should enable Croatia to cope with the pressure of competition and market forces inside the European Union in a middle term, reads a joint press release which the Council, the joint body of the EU and Croatia, released after its first session in Luxembourg on Tuesday.
The Stabilisation and Association Council was established in accordance with the Croatia-EU Stabilisation and Association Agreement (SAA), which entered into force on 1 February this year.
The Council convenes once a year to consider the development of bilateral contractual relations.
The meeting in Luxembourg revolved around the implementation of the SAA.
The full implementation of the SAA will help Croatia to prepare itself for full membership in the Union, the press release reads.
Croatia's 21-member delegation at the Luxembourg meeting was led by Foreign and European Integration Minister Kolinda Grabar Kitarovic.
The EU delegation consists of the EU Council's chairman, Luxembourg Foreign Minister Jean Asselborn, the EU High Commissioner for the Common Foreign and Security Policy, Javier Solana, Britain's Ambassador to the EU John Grant, who represented the next EU chair, and Enlargement Commissioner Olli Rehn, who attended the session on behalf of the European Commission.
According to the joint press release Croatia's future is full membership in the EU.
It is reiterated that a bilateral inter-governmental conference, which should open the membership negotiations, will be convened as soon as the EU Council establishes that Croatia is fully cooperating with the Hague tribunal.
The EU reiterates that full cooperation with the Hague tribunal is an important precondition for launching accession negotiations, and asks Croatia to take all necessary steps to solve this issue without delay, the press release reads.
Commissioner Rehn said at a news conference that insistence on the full cooperation with the UN tribunal was a key element of the EU policy towards all countries in the region.
With regard to the return of refugees, which is still an important challenge for Croatia, the Stabilisation and Association Council welcomed the results of a regional ministerial conference held in Sarajevo this January, when Croatia, Bosnia-Herzegovina and Serbia-Montenegro assumed an obligation to close the issue of refugee return until the end of 2006.
The situation in the Croatian judiciary is still a major challenge, although some positive steps have been taken recently.
With regard to minority rights, the Council says that Croatia has made positive progress, particularly as regards the greater role of minorities in the public life, and it encourages Zagreb to continue with such efforts.
The Council also hails Croatia's efforts to adjust national laws with European standards, particularly in the sector of internal market and trade. It calls on Croatia to continue strengthening administrative and judicial structures, particularly for the implementation of the acquis communautaire.