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EU leaders, after agreeing billions of euros in initiatives to combat record high youth unemployment at their June summit, turned their attention Friday to the enlargement of the 27-nation bloc.
European Union leaders had worked into the early hours to stop Britain from throwing a spanner in the works to a tentative deal reached earlier on the bloc's next trillion-euro budget.
They also agreed to deploy up to 8.0 billion euros ($10.4 billion) in initiatives to combat unemployment among one in four of Europe's under 25-year-olds.
But as the leaders convened for a second day of deliberations, it was EU enlargement that topped the agenda as they welcomed Croatia into the fold and at the same time turned their sights on Serbia.
In spite of Europe's long and debilitating crisis, eastern European states continue to bid to join the bloc of 500 million people.
When it officially joins at midnight on Sunday, Croatia will be the first new arrival to the club since Bulgaria and Romania in 2007, but only the second member after Slovenia of the former Yugoslavia since its bloody breakup in the 1990s.
European president Herman Van Rompuy described Croatia's accession as "truly an historic moment ... for your government, for the citizens of your country" as well as "a milestone for the region as a whole."
"You've always been European," van Rompuy said.
"Your entrance now, just when your neighbours are taking courageous steps along the same path, after a recent history of war, reminds all of us around this table of Europe's fundamental purpose: living together in peace, living together in prosperity," van Rompuy said.
Croatian Prime Minister Zoran Milanovic said his country's journey to EU membership had been a long one, "with a lot of scrutiny, a lot of checks and balances, a lot of chapters."
But he vowed that Zagreb "will do anything and everything and beyond that to help and assist (...) our neighbours who are not members of the club yet," in a reference to Serbia.
"We think that the process should start as soon as possible, last reasonably long but not too long, and have the whole process wrapped up," Milanovic said.
Serbian premier Ivica Dacic has held out hopes of bringing his country into the EU fold within a quick four to five-year span.
Earlier this week, EU ministers unanimously recommended that Serbia begin EU membership negotiations by the very latest in January 2014, as the former pariah state said it had done "everything to become a member of the European family".
The EU's Enlargement Commissioner Stefan Fuele said the talks may even begin "as early as October."
In addition to opening the door to Serbia, the summit will also formally adopt a mandate to start talks on a Stabilisation and Association Agreement with Kosovo.
This follows an historic agreement struck between the two on April 19 to normalise their ties, after Kosovo unilaterally proclaimed independence from Serbia in 2008.
On the first day of their meeting, European leaders had agreed to deploy 8.0 billion euros to help create jobs for young people.
But it was simmering doubts over a tentative deal on the EU's next trillion-euro budget that caused the meeting to stretch in to the early hours of Friday.
Britain's Prime Minister David Cameron ruffled feathers by pledging to do battle to protect the 3.1 billion sterling annual UK rebate won in 1984 by Margaret Thatcher.
"It's absolutely essential that we stick to the deal that we reached in February and that we protect the UK rebate," he said, referring to a February proposal on the budget.
Diplomats said Cameron's objection had delayed the opening of the talks and Schulz worried that the British premier's stand could derail a compromise reached on Thursday.
"I think Prime Minister Cameron is never happy when we discuss the European budget," Schulz said.
EU diplomats were more blunt, with one telling AFP on condition of anonymity that it was "scandalous that a European summit is once again taken hostage by Cameron".