Borrell, who is on a two-day official visit to Croatia, said the European Parliament supported Croatia's full membership of the EU.
It is in the interest of the European people that this part of Europe is politically stable, economically developed and integrated with Europe, Borrell said.
Croatia must apply all regulations from its Stabilisation and Association Agreement with the EU, Borrell said, adding that this meant rooting out all forms of discrimination against EU citizens wishing to buy real estate in Croatia.
The Stabilisation and Association Council in Luxembourg on Monday said Croatia had continued meeting political criteria, adding, however, that the country was not meeting its obligations from Article 60 of the SAA, which regulates the sale of real estate to EU citizens. Under the regulation, after the expiration of a four year transition period on 1 February 2009, Croatia should make the right of EU citizens to buy property in Croatia equal to that of its own citizens.
Speaking of relations with neighbouring countries and regional cooperation, Borrell said that relations with neighbours must be regulated through bilateral dialogue.
You must not think that the European Union will do that for you, he added.
The initiative aimed at strengthening regional cooperation is not an attempt to renew the former Yugoslavia, the EP president said. You must do all you can to encourage progress in neighbouring countries because stability of the region is in Croatia's interest, he said.
Borrell called on Croatia to continue implementing reforms important for the functioning of the rule of law.
He welcomed the CEFTA meeting held in Bucharest last week, saying that foundations for a new free trade zone were laid at that meeting.
Present in parliament during Borrell's speech were Croatian Prime Minister Ivo Sanader and members of his cabinet, members of the negotiating team and representatives of the diplomatic corps in Croatia.
After the address, Borrell and Parliament Speaker Vladimir Seks gave statements to the press.