PM Sanader, who arrived in Belgrade on Monday morning, was the first Croatian premier to pay an official visit there after 15 years.
"Normalisation of relations between Croatia and Serbia and Montenegro has no alternative," Sanader said during his talks with Marovic, who is also the chairman of the state union's Council of Ministers.
Sanader and Marovic agreed that bilateral relations were improving and that the two countries aspired to achieve European values and standards, the rule of law and respect for human and minorities' rights.
At a press conference, Marovic highlighted the importance of the first visit of a Croatian PM to Belgrade, and described the talks as constructive and successful.
The Marovic-Sanader talks focused on bilateral relations as well as on the two countries' prospects of joining Euro-Atlantic institutions.
"The sooner Croatia starts its integration into Euro-Atlantic institutions the better it will be for other countries in the region," the Croatian guest said, adding that this would also accelerate the integration of Serbia and Montenegro.
Marovic agreed, adding that Croatia's example was "instructive as well as a valuable experience" for his country. In this context he said that his country had to make some painful steps, as Croatia had already done, in relations with the UN war crimes tribunal in The Hague.
Marovic hailed a bilateral agreement on the protection of minorities signed earlier in the day by Croatian Justice Minister Vesna Skare Ozbolt, who arrived in Belgrade as part of the Croatian government's delegation, and the Serbian-Montenegrin minister of human and minorities' rights, Rasim Ljajic.
Marovic said that a decision on demilitarisation of the border had been made and that the demarcation of some contentious sections of the borderline would contribute to the normalisation of the life of people living on both sides of the frontier.
He welcomed Sanader's statement about the prolongation of the liberal visa regime for Serbian and Montenegrin citizens entering Croatia, although Croatia had some obligations in border control within its efforts to integrate into the EU.
Croatia's PM told reporters that the future of the two countries lay in a united Europe. He recalled the hard history of European nations adding that the essence of the European integration was in overcoming such past.
The project of uniting Europe cannot be completed unless all countries in the region enter the EU, Sanader said, adding that the speed of reforms and strengthening of democracy, as well as the rule of law and the respect for human and minorities' rights, would define the pace of each country's admission into the European bloc.
Sanader described the agreement on minorities' protection as a great step forward as well as "a confirmation that national minorities in the two countries are not a problem or burden but an opportunity for the development of society and making it rich".
Sanader also hailed Belgrade's decision on border demilitarisation as an important step forward in the normalisation of relations between the two neighbours.
The Croatian PM reiterated that Zagreb expected entry negotiations with the EU to start by March 2005 at the latest.
He and his host also spoke about the importance of strengthening bilateral economic relations, to which they said a free trade agreement also contributed.
Sanader also pointed to the problem of missing persons as one of the priorities, and added that Croatia was still searching for 1,200 citizens who went missing in the 1990s war.
He mentioned the issues of refugee return and property restitution, adding that their solution was now only a matter of financial possibilities.
After the talks, the Croatian PM and Serbia and Montenegro president made public a joint statement in which they highlighted the need for the two neighbours to cooperate, their joint aspirations to Euro-Atlantic integration processes, as well as the wish to solve outstanding issues, including the destiny of missing persons.
The statement read that "the Republic of Croatia and Serbia and Montenegro are interested in solving all remaining outstanding issues, in establishing a good neighbourly partnership on the foundations of equality, reciprocity, trust and the joint vision of a European future for our part of Europe, and in the completion of the process of normalisation in all segments of bilateral cooperation".
The Croatian delegation led by Sanader also visited the state union's parliament and held talks with its speaker Zoran Sami.