ZAGREB (AFP) - Tens of thousands of Croatians cheered the country's entry into the European Union at midnight Sunday as fireworks lit up the skies above Zagreb.
It was a historic moment for the former Yugoslav republic, coming nearly two decades after it emerged from a bloody independence war in the 1990s.
Some 20,000 people gathered at Zagreb main square, joining more than 100 European dignitaries to mark event on the stroke of midnight (6am Singapore time) when Croatia officially became the bloc's 28th member.
"Welcome to the European Union!" European Commission President Jose Manuel Barroso told the crowd.
Countdown celebrations were held in towns throughout the country as crowds cheered to the EU anthem, Beethoven's "Ode to Joy", waving EU and Croatia's flags in joy.
Welcoming Croatia into the bloc, European President Herman Van Rompuy said the country had "crossed an important threshold.
"It will change the life of this nation for good," Van Rompuy told the festive crowd in Zagreb.
As thousands of Croatians took to the city squares to celebrate, officials removed the "Customs" sign at a border crossing with fellow EU member Slovenia.
At the same time, the "EU" sign appeared at the land border with Serbia, another ex-Yugoslav republic which on Friday got a green light from Brussels to open membership talks by January 2014.
But the celebrations were overshadowed by economic worries that the membership would only burden already recession-hit Croatia's economy.
"There is nothing to celebrate, it will not get better, prices will jump and we will become a cheap workforce," said 30-year old Zagreb administrator Branka Horvat.
The centre-left government hopes that EU entry will attract badly needed foreign investment and boost the economy with 11.7 billion euros (S$19.3 billion) of potential financial aid.
Croatia's tourism-oriented economy has been either in recession or stagnant for the past four years, while unemployment stands at around 20 percent.
The country's per capita gross domestic product is 39 percent below the EU average, with only Romania and Bulgaria lagging behind, the bloc's figures show.
But Croatian President Ivo Josipovic vowed not to "let the cloud of the economic crisis overshadow our vision and optimism."
"The crisis is a challenge, an invitation to make tomorrow better than today," Mr Josipovic said in his celebratory speech in Zagreb.
A lavish EU entry celebration in Zagreb included performances by some 700 singers, musicians and dancers at three stages decked out in the EU's trademark blue colour.
Nik Kolveshi, 23-year-old student from Zagreb, said Croatia was "finally joining its family." "Many opportunities will open as we will be officially linked with Europe," he said.
"I am satisfied that we are finally there where we belong, but we are not ecstatic as we have a pile of problems to deal with," said psychiatrist Lukrecija Pavicevic.
But Croatia's branch of global Occupy movement declared: "EU entry is an economic genocide against our citizens."
Prime Minister Zoran Milanovic earlier dismissed fears that Croatia, with a population of 4.2 million, would be an economic burden on the EU.
"At the end of the day we are not a part of the eurozone," he said referring to the crisis-ridden single currency bloc.
In a toast at the official dinner on Sunday, Mr Josipovic described the EU accession as the "end of one stage in Croatia's history and the beginning of a new, European age for us.
"The moment of Croatia's accession to the EU is a time of many doubts and questioning. In Croatia also there are similar dilemmas," Josipovic added, in a reference to the eurozone debt crisis.
Zagreb has aspired to join the EU club ever since it proclaimed independence from the former Yugoslavia, a move that sparked the bloody 1991-1995 war against rebel Serbs backed by Belgrade.
Croatia becomes only the second former Yugoslav republic to join the bloc, after Slovenia, following the bloody breakup of the ex-communist federation in the 1990s.
Heads of state from all six ex-Yugoslav republics were among the guests, but the leaders of many EU member states including Britain, France and notably Germany did not attend.
German Chancellor Angela Merkel cited a full workload to excuse herself from the event, but both Croatian media and the opposition labelled her decision a "diplomatic slap".