STOCKHOLM (Reuters) -- Slovenia and Croatia have signed a border arbitration agreement, paving the way for the two countries to clear up a nearly two-decade-old dispute that has held up Croatia's European Union bid.
Slovenian Prime Minister Borut Pahor and Croatian Prime Minister Jadranka Kosor signed the deal in Stockholm following a decision by the Croatian parliament earlier this week to back it.
Under the agreement, an international arbitration team is to resolve the issue of the disputed frontier and both countries will abide by its ruling.
Croatia's Kosor told a news conference she believed the two states had opened a new chapter in their relations.
"I am convinced that this is a good agreement, a good agreement for Croatia, for Slovenia, but certainly also a good agreement for the European Union," she said through an interpreter after signing the agreement.
The two countries have been unable to agree their land and sea border since becoming independent in 1991 and EU member Slovenia blocked Croatia's EU entry talks last December because of unresolved border issues.
In September, Slovenia lifted a veto and allowed Zagreb to resume membership talks after the two prime ministers agreed to resort to international arbitration.
EU Enlargement Commissioner Olli Rehn welcomed the signing.
"This is a most European way of peaceful settlement of disputes. I encourage both countries to proceed with ratification without unnecessary delay, and hope that Croatia makes the last mile in the negotiations, which are reaching the final stage."
'Path Of Success'
Slovenia's Pahor recognized that Croatia would one day be a member of the European Union, and that it has been trying to lay out a distinct border line to fully exercise its sovereignty.
"For 18 years they have been trying to achieve this and failed, but today, finally, they are on the path of success so that we can put this issue off the agenda," Pahor said at the meeting.
Sweden, which currently holds the presidency of the European Union, had invited the prime ministers of the former Yugoslav republics to the Swedish capital to sign the agreement.
Swedish Prime Minister Fredrik Reinfeldt said the deal showed political courage by the two prime ministers to resolve a difficult issue, but warned that negotiations would be tough.
"I think we should be fully aware of the many obstacles that you two have already overcome in order to be here today," he said. "We should be aware that there will be difficulties yet ahead of us."
Sweden has made enlargement of the 27-member bloc a priority during its six-month presidency and believes the deal will ultimately bring progress in Croatia's EU accession talks.
The dispute involves a sliver of land on the Istrian Peninsula in the northern Adriatic and demands by Slovenia -- squeezed between Italy and Croatia -- to have direct access to international waters, which could force Croatia to cede some of the sea it sees as its own.
Following signature by the prime ministers, the deal must be ratified by national parliaments, where opposition parties have expressed dissatisfaction in both countries.