EU hopes for dramatic change in ties with Croatia

BRUSSELS, Jan 18, 2000 -- (Reuters) The European Union said on Monday the way was open to a dramatic improvement in ties with Croatia under its new government.

It also held out hope that reforms in Zagreb could inspire democratic changes in Serbia.

A spokesman said a visit to Zagreb on Friday by European Commission President Romano Prodi had shown the former Yugoslav republic was ready for a rapprochement with the EU.

After meeting acting President Vlatko Pavletic and Prime Minister-designate Ivica Racan, Prodi said he was confident a new era was opening.

"It was clear that the new Croatian government, which holds a large majority in the new parliament, is fully committed to Europe," Ricardo Levi, the executive Commission's chief spokesman, told a news briefing.

"On both sides (there were) high hopes of a dramatic change in the relationship between the European Union and Croatia, with far-reaching consequences," Levi said.

The EU long mistrusted Croatia because of the nationalist policies associated with President Franjo Tudjman, who died last month. A center-left coalition beat his conservative HDZ party in a January 3 election, ending its 10-year rule.

Until now, Zagreb has been denied access to EU funds and blocked from even initial talks on membership of the 15-nation bloc.

Levi said the EU hoped Belgrade would be influenced by what he described as a circle of democracy forming around it.

The EU has arms and oil embargoes in force against Serbia because of its role in the violent disintegration of former Yugoslavia and has tried to encourage the Serbian people to oppose Yugoslav President Slobodan Milosevic.

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